Unemployment Insurance

“I can’t work, but I’ve been receiving unemployment because I need a roof over my head. Will getting unemployment cause my SSA disability appeal to be denied?”

The Answer: Perhaps…or maybe not.

At our office, we receive inquiries often on this issue, particularly since 2009 when layoffs and extensions of unemployment benefits have been common. Those clients who then suffered an illness or injury have many times continued to receive unemployment even when their health has precluded full time work. The conflict is clear: how can the client say they are “able and available for work” while at the same time applying for disability benefits with the Social Security Administration?

In some cases, there should be no conflict seen between concurrent receipt of unemployment and SSDI benefits. An individual receiving unemployment may be “able and available” to perform only such reduced, part-time jobs which would not be disqualifying “substantial gainful activity” paying less than the $1010 gross wages per month permissible in the SSA rules. In addition, California unemployment rules permit the collection of unemployment benefits when an individual is only available part time so long as the job on which the claim is based was part time (UI Code Section 1253.8).

Yet the interplay between unemployment insurance and Social Security Disability Insurance (SSDI) has been given much attention recently. In July 2012, the Government Accountability Office (GAO) published a study on the potential savings available if SSDI and unemployment insurance benefits were not available concurrently. The study determined that substantial savings could be achieved if overlapping payments of unemployment insurance benefits and SSDI were eliminated. Because no federal law authorizes the recapture of funds paid to an individual receiving both unemployment and SSDI benefits, the GAO recommended that each program review a recipient’s eligibility for that program.

Unemployment insurance benefits are administered at the state level. Therefore, each state may have slightly different eligibility requirements. Generally, a state’s unemployment benefits are available to people who have become unemployed through no fault of their own and are currently able and available for work. The Employment Development Department (EDD) oversees this program for the state of California.

Receipt of unemployment insurance benefits does not preclude SSDI benefits (Chief ALJ Memorandum, No. 10-1258, August 9, 2010). However, the Chief Administrative Law Judge (ALJ) of the SSA reminded all ALJs that “the receipt of unemployment insurance benefits is only one of many factors that must be considered in determining whether the claimant is disabled.” In other words, an ALJ may consider the receipt of unemployment insurance benefits as an acknowledgement that the individual is able and available to work, but the ALJ cannot determine that an individual is not disabled under the SSA’s standards solely because of the receipt of unemployment.

The pressing question: will receiving unemployment insurance benefits adversely affect the outcome of your disability claim before the SSA? The best answer is maybe. The ALJ may completely disregard the receipt of unemployment or may determine that an individual is able and available to work and not disabled. Because there is no clear regulation pertaining to concurrent receipt of unemployment, there is no definitive answer.


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