The interplay of Social Security Disability and unemployment benefits

Some people seeking disability benefits mistakenly believe they can receive unemployment benefits concurrently.

Though Michigan's economy - and that of the entire country - has made a strong recovery in the years following the "Great Recession" that began in 2008, unemployment continues to be a reality for many people. Countless others have finally been able to find work after long months of sending out dozens of resumes and going on fruitless interviews, sometimes being forced to settle for a lower-paying or more physically demanding position just to put food on the table.

The search for a new position can be infinitely more complicated if you suffer from a debilitating medical condition, and even if you may truly want to work, your body just might not be willing to cooperate with you. Should your illness or injury be disabling, there is a chance you might qualify for benefits through either the Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) programs, but applying can be difficult, and your medical condition must keep you out of work for at least a year.

If you are disabled and out of work - and you feel like you are stuck between the proverbial rock and the hard place - you may be tempted to collect unemployment benefits while you await disability. In fact, you may not understand why you aren't entitled to both. The problem comes, however, when you consider the stated purpose of each of those programs, one funded by the state (unemployment), the other by the federal government (disability). Once you do that, you will begin to realize why disability experts generally advise against attempting to "double dip" into both benefit systems.

A key disconnect between the two

The purpose of unemployment insurance is to help workers who have lost jobs through no fault of their own bridge the financial gap until they can find comparable employment. When you collect unemployment benefits, you are certifying to state authorities that you are both physically ready and able to work, and that you are actively looking for another position. That is why recipients have to periodically update unemployment officials on how their job search is progressing (and that they have sent out a minimum number of resumes, etc).

Disability benefits, on the other hand, are there to provide financial help to people who are too sick to hold down a full-time job. Recipients of disability benefits essentially swear to the government that their physical or mental disorder is so severe as to prevent them from working altogether, thus the need for disability-based assistance.

Possible penalties

The State of Michigan Unemployment Insurance Agency, hit hard by an overwhelming number of unemployment claims in recent years as the state's economy has struggled, has been cracking down on anyone trying to collect both types of benefits. This "crackdown" could result in being forced to pay back any amounts of unemployment compensation collected prior to a disability claim award, and might even end in criminal charges for the recipient.

A similar initiative has been proposed at the federal level, with the introduction of the Reducing Overlapping Payments Act. The Act will, if passed, not only mean that it will be impossible to collect both types of benefits at once (by barring any recipient who collects unemployment insurance benefits from receiving disability payments for the same timeframe), it would make it possible for criminal fraud charges to be brought against anyone attempting to do so.

There may be very limited situations in which it would be appropriate for a disabled worker to seek Michigan unemployment benefits while awaiting a disability decision, but those will be rare. Before attempting to do so, it is strongly advised that you seek the advice of an experienced Social Security Disability attorney like those at Babut Law Offices, PLLC. Contact the firm online or by calling one of their four statewide office locations for more information.

Keywords: Social Security Disability benefits, Social Security Disability Insurance, SSDI, Supplemental Security Income, SSI, unemployment