May you apply for Social Security disability benefits while drawing state unemployment benefits? A question we get pretty often in today's economy.
First, let me clarify that there is a big difference between disability and unemployment. They are not at all the same thing.
In Alabama, you may draw unemployment benefits if you have lost your job through no fault of your own. But you must be able to work, available for work, and be actively seeking work to qualify for unemployment benefits. A disabled person by definition is not able to work and therefore, would not qualify for unemployment under state rules.
A disabled person is one who has a physical or mental impairment so severe that it prevents him or her from performing work related activities on a full-time basis. Full-time usually means 8 hours per day, 5 days per week.
Now to answer the question: May a person who is drawing unemployment benefits file for Social Security disability? The short answer is yes.
Unemployment is not wages or earned income, so the income does not count towards the "substantial gainful activity" (SGA) rule. While Social Security frowns upon a person drawing unemployment while applying for disability, it does not strictly prohibit it. Recent opinions issued by chief administrative law judges recognize the facts:
- There is no guarantee that filing for Social Security disability will result in a payment.
- Social Security disability can take a long time to be decided.
- An individual should not have to choose between collecting unemployment benefits or filing for Social Security disability.
- Unemployment is just one factor that Social Security will consider when judging whether a claimant is eligible for disability benefits.
At hearings, some judges seem to have more trouble with unemployment benefits than others. I honestly can't think of a case where I felt that a claimant lost his or her SSDI benefits solely on the fact that he or she was drawing unemployment benefits. In any event, as I tell my clients, "You can't starve for 12 to 24 months while you're waiting to see if you can get Social Security disability."
June 2013 Update: A bill was introduced in the US Senate (S. # 1099) on 6/ 6/13 which would eliminate Social Security disability benefits for any month in which unemployment benefits were received by individuals under full retirement age (66). As of this writing the bill is still in the Senate Finance Committee and has not been scheduled for a vote.
Here is an unfortunate situation that we see all too often. A person is really too sick to work but cannot afford to quit and file for disability. If a person is working at "substantial gainful activity" (SGA) level, Social Security says he/she is not disabled. They will not accept a disability application. SGA level for 2013 is earning at least $1,040 per month before taxes. Please note that this applies to earned income or wages, not investment or retirement income.
The only solution available to a person who must work is to work below SGA level; that is, to earn less than $1,040 per month. This would usually involve part-time employment. Then, it is possible to apply for Social Security disability while working.
We see people everyday in our practice who really should not be working. However, as a client told me recently, "If I quit work I'd be on the street." Sadly, the options are: quit work and wait out the Social Security disability process, which can take months or years; or, try to get by on earning less than $1,040 per month.
If you need help plowing through the complicated disability process, please call our Huntsville, AL office. We'd be happy to speak with you and there is no charge for a consultation. In fact, we make no charge unless we accept your case and help you win back pay benefits. It's a no risk proposition.
Contact us at (256) 799-0297 or toll free at 1-855-854-CASH.
