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Making the Right Choice Between Unemployment and Disability Benefits

Not working can put you in a very scary financial situation of not being able to pay your bills.  Most people who lose their jobs file for unemployment, but those who have lost their job may also be considering disability benefits.

Sometimes people apply for both unemployment and disability.   However, this is never a good idea because for unemployment you certify you can work but for disability you certify that you cannot work.  You really need to decide which one to apply for rather than both.

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Understanding the Conflict: Unemployment vs. Disability Benefits

Unemployment benefits are for those who are out of work and seeking new employment. When you apply for unemployment, you are saying you are able to work.  When you apply for unemployment benefits, you are required to consistently update your status to show that you are actively searching for work and are willing to accept reasonable job offers. If you cannot prove that you are looking for work, then your unemployment benefits can be denied.

Disability benefits are for those who have a qualifying medical disability and cannot work.  When you apply for Social Security Disability Income (SSDI) you are saying that you are unable to work.

Because these two benefits require you to claim very different things (ready and able to accept work versus unable to accept to work), filing for both at once is a problem. Just by the definition in the benefits, there are contraindications in eligibility between the two programs. You can’t be medically unable to work, but also medically able to work.

Reasons to Avoid Filing for Unemployment While Considering Filing for Social Security Disability Benefits

Social Security will ask you when you file for disability if you have any pending claims for unemployment or worker’s compensation.  Social Security will offset Social Security disability benefits against unemployment or worker’s compensation.

If you start receiving unemployment, then realize your health won’t allow you to return to work for at least 12 months, then cease applying for unemployment and file for disability benefits for the following reasons:

  • Impact on Your Disability Claim: As discussed above, when you file for unemployment but are also disabled, you create conflicting information about your ability to work.  It’s important to be honest about what you are physically able to do. If you file for unemployment first, and then try to file for disability, your disability claim will likely be denied, or at the very least delayed until the determine when your onset of when you could no longer work is.
  • Legal and Ethical Implications:   You must report to Social Security if you are receiving any unemployment payments.  There will be an offsetting of the 2 benefits.  There are consequences of double dipping or making false claims. If you are caught falsifying information on either application, then you may find yourself being required to pay back any benefits you received.
  • Focus on the Right Benefit: If you want the best chance of getting the benefits you need, prioritize the benefit that aligns with your true situation.  There are long-term financial and medical advantages provided by disability benefits such as monthly benefits at a full retirement amount and access to Medicare.  You can lose this opportunity by muddling the water with unemployment claims.

What to Do Instead: Exploring Disability Benefits Options

Instead of trying to get unemployment for a short-term fix to satisfy a long-term problem, consult a disability attorney right away. There are many benefits to seeking professional advice for disability claims, and an attorney who is knowledgeable in disability benefits can help you navigate the application and appeals process and increase your chances of approval.

It may be tempting to file for unemployment, even temporarily, while waiting on your disability claim, but it is a bad idea that can hurt you financially in the long run. If you claim you are actively seeking work while also claiming you are unable to work, you will likely hurt your disability case.

Instead, work with an experienced long-term disability attorney who understands the nuances of the process and can help you get your claim approved. If you’re facing an appeal after being denied disability, or you have questions about what you should do next, contact Arthur Law Firm (419) 782-9881 for a free consultation.