Can I apply for Social Security disability while collecting unemployment benefits?

Question: I was laid off and haven’t been able to find work since then due to a bad back, diabetes, bursitis of the knee, and carpal tunnel in both wrists. Can I apply for Social Security disability while collecting unemployment benefits?

It can be a problem to collect unemployment benefits while applying for Social Security disability benefits because, when you file for unemployment benefits, you are saying you are willing and able to work, but when you apply for disability benefits, you are saying that you can’t work, for at least a year. Officially, Social Security says that collecting unemployment benefits is not a bar to being approved for disability benefits. After all, in most states (except for Texas, Georgia, and a few others), you are not necessarily saying that you are available to work full time, and disability applicants are allowed to work a limited amount of time.

But collecting unemployment benefits is a factor that administrative law judges (ALJs) can consider when they’re deciding your disability case. ALJs usually know when you’re collecting unemployment benefits, because Social Security has access to unemployment benefit information and usually includes it in your claims file. Some judges do not like to see that disability applicants are collecting unemployment benefits no matter what the circumstance. Some judges will deny your case altogether if you received unemployment after you applied for disability benefits, unless you can prove your condition has medically worsened since you applied for unemployment benefits. Other judges simply will not pay you disability benefits for the time period that you were receiving unemployment. Still others don’t care even if you’re receiving unemployment benefits at the time of your hearing. These judges realize that people need income to live on, and that there is no guarantee that disability benefits will be granted after the long process of applying for benefits.

What should you do? To be safe, especially in the few states where filing an application for unemployment means you’re saying you’re available to work full time, you may want to consider not applying for disability benefits until your unemployment benefits run out, or at least amending the date you say you became disabled (your “alleged onset date”) until after your unemployment benefits have stopped.

If you don’t, at your hearing, be prepared to explain why you’re collecting, or collected, unemployment benefits. The judge may ask what jobs you applied for while you were collecting unemployment (and whether they were similar to your old job). If the jobs were ones that your limitations say you aren’t capable of doing (for instance, a job requiring heavy lifting), you may have a problem. You may want to offer to amend your alleged onset date to a date after you stopped collecting unemployment benefits.

Likewise, if you applied for a full-time sedentary work but are telling the judge you can’t sustain full-time work, you may have a problem. You could argue that you probably could not have been able to sustain full-time work for more than a few weeks without great pain or other symptoms or without getting fired. As federal judges have stated in the past, “A desire to work does not mean that a claimant can actually work, and “Receipt of unemployment insurance benefits does not prove ability to work.”

If you have a valid argument that there is no legal conflict between your collecting unemployment benefits and disability benefits, tell the judge. Here are some examples:

  • You were applying for jobs that were within your physical or mental limitations (for example, no heavy work, fast-paced jobs, or high-stress jobs dealing with the public).
  • You were applying for part-time jobs.
  • You applied to jobs where you might be able to work if the employer agreed to accommodate your disability by providing special equipment or an aide to help you do your job, even though the accommodations you would have needed wouldn’t be reasonable for most companies due to their expense.
  • You were applying for “light” work, since that’s all you can do, and you’re over 55. In this case, the fact that you can do light work may not hurt your disability claim. Thanks to a special “grid rule” for those 55 and older and limited to light work, unless:
    • you can do your old job
    • you have job skills you could use to easily switch to light work, or
    • you’ve had recent job training.
  • You were applying only for sit-down jobs, since that’s all you can do, and you’re over 50. In this case, the fact that you can do sit-down work may not hurt your disability claim, again thanks to a grid rule, those 50 and older and limited to sedentary work will be found disabled unless you can do your old job or you’ve had recent job training for sedentary work or have job skills for sedentary work.

In this last circumstance, watch out, because some states don’t pay unemployment benefits to those who say they can only do sedentary work, because they aren’t available for a significant percentage of jobs out there.

Consider amending your onset date if you applied for full-time jobs, applied for jobs that were more demanding than your physical and mental limitations allow for, or if the judge asks you to amend it. Of course, by doing this, you could be giving up a large sum of money, so it’s best to talk about this with a disability lawyer before you decide what to do.