HOW UNEMPLOYMENT COMPENSATION AFFECTS A SOCIAL SECURITY DISABILITY CLAIM

Many judges frown on a claimant who has received Unemployment benefits since becoming disabled.  I've seen judges either deny claims or amend the onset date to the date unemployment benefits were stopped, costing a lot of money in back pay.  I even had one judge insist that the claimant repay unemployment benefits as a condition to getting SSDI benefits approved.

What Should Your Representative Argue Regarding Unemployment Benefits?

1)  Unemployment Compensation is not Substantial Gainful Activity because it does not involve work.  Therefore, it should not interfere with Social Security disability benefits.

2)  In the words of former Chief Administrative Law Judge Frank A. Cristaudo, "an individual need not choose between applying for unemployment insurance and Social Security disability benefits..." since the Social Security disability process can take months or years.

In a memo to all administrative law judges in 2010, Chief ALJ Cristaudo reminded judges that receipt of unemployment benefits does not preclude the receipt of SSDI benefits in many cases.  (Chief Administrative Law Judge Memorandum 10-1258, August 9, 2010).

3.  There is no clear rule in the federal regulations which prohibits receiving unemployment benefits and Social Security disability benefits at the same time.

It should be noted that many judges will use the issue of unemployment benefits to question the claimant's credibility.  While unemployment payments require an individual to be able to work, available for work and looking for work--Social Security disability requires that an individual prove that he/she is not able to work, at least at some exertion levels.  Unemployment and SSDI rules seem to contradict each other.  A claimant tells unemployment officials that he is able to work but tells Social Security that he is not.

So, the issue of unemployment benefits will usually come up in Social Security disability appeals or hearings.  I've had a few judges that didn't bring up the issue but most will.  Your representative will need to deal with it at the hearing level.

Is it better not to receive unemployment benefits after you allege disability?  Yes, that is better--but it may not be possible.  I tell my clients frankly, "It's better not to receive unemployment benefits; however, your first concern is not starving to death or losing your home while you're waiting on Social Security.  So do what you must do."