Can I Collect Unemployment If Terminated from a Job While on Disability?
This question is particularly interesting because it touches on several nuances involving the notion of “working while collecting Social Security Disability benefits” and the overlapping coverage of unemployment benefits and SSDI benefits.
Perhaps not surprisingly, the answer is “maybe.” The definitive answer for each individual depends on the facts and circumstances of your case and which state you reside in. In this blog article, we explain in detail all of the particulars you need to know to find out if your situation is such that you can collect unemployment if terminated from a job while you are on disability.
The Clauson Law Firm concentrates a large portion of our legal practice on helping people with disabilities get all of the available government benefits to which they are entitled. Many disabled individuals are unaware that they qualify for Social Security Disability Insurance (SSDI) benefits, Supplemental Security Income (SSI) benefits, workers compensation, or unemployment benefits.
Clauson Law is the disability lawyer for all disability law topics in North Carolina and around the U.S. Contact us if you have any questions about your eligibility for disability benefits. We’re always here to help disabled individuals receive their benefits.
Explanation of Unemployment Benefits
Unemployment benefits are paid by each state to people who have lost their jobs or been laid off due to factors unrelated to misconduct connected to your job.
While every state has its own particular qualifications for unemployment benefits, most states generally make unemployment benefits available to those who qualify by either earning a minimum amount of wages during each quarter of the previous 12 to 15 months, or those who work a minimum number of hours each week.
The main feature of unemployment benefits as they relate to SSDI is that they are intended to compensate a percentage of the wages lost by those who recently lost their job. In this respect, unemployment benefits serve a similar purpose to Social Security Disability Insurance (SSDI or SSD) benefits.
One important key requirement for those seeking unemployment benefits is that they must certify that they are able and available for work immediately. Some states also require that unemployment recipients document the efforts they make to find a job each week.
B. Explanation of Social Security Disability Benefits (SSDI)
Social Security Disability Insurance (SSDI or SSD) is a federally administered program that pays financial benefits to workers who have become disabled by either injury or illness and who have a long employment history over the course of their lives. The program only pays for long-term disabilities because the federal government defines a disability as follows:
A physical or mental impairment that lasts or is expected to last 12 months and which prevents the person from performing substantial gainful activities (SGAs).
The term “substantial gainful activities” translates into the ability to earn a minimum amount or income each month. In 2024, if a SSDI applicant can earn more than $1,550 per month of countable income by performing work, they will be deemed ineligible for SSDI benefits.
If an SSDI applicant or recipient cannot earn more than $1,550 per month, and they otherwise qualify for SSDI benefits, then they can receive SSDI benefits. (Blind SSDI applicants and recipients may earn as much as $2,590 per month and still qualify for SSDI benefits.)
As noted in the previous section explaining unemployment benefits, Social Security Disability benefits are intended to provide some financial support to eligible workers who suffered a long-term disability preventing them from working.
How Is the Amount of Your Monthly SSDI Benefit Determined?
To determine an SSDI claimant’s monthly benefit amount, the Social Security Administration (SSA) looks back at the 35 highest earning years’ taxable income. The SSA “indexes” those 35 figures, adjusting each one to account for national wage trends, and then averages the result of 35 indexed figures to arrive an Average Indexed Monthly Earning (AIME) figure.
Using the AIME figure as a starting point, the SSA applies the following formula:
- Add 90% of the first $1,174 of the AIME, plus
- 32% of the AIME between $1,174 and $7,078, plus
- 15% of the AIME above $7,078, if any.
- Round down the result to the next lowest $0.10 (dime) if not already divisible by 10.
For example, suppose an SSDI claimant’s AIME was $6,350. The formula would work as follows:
- 90% of the first $1,174 = $1,056.60, plus
- 34% of the of the AIME between $1,174 and $7,078. ($6,350 – $1,174 = $5,176) $5,176 x .32 = $1,656.32, plus
- 15% of the AIME over $7,078, if any = $0.00 Add $1,056.60 + $1,656.32 + 0 = $2,712.92 Rounded down to the next lowest .10 = $2712.90.
This person’s monthly SSDI benefit amount is $2712.90 or Primary Insurance Amount (PIA).
Working While Receiving Social Security Disability Benefits
Because SSDI benefits are reserved only for people whose long-term disability prevents them from working, it may seem odd that someone can work and still collect SSDI benefits.
But there are special features in the SSDI program that allow SSDI benefits recipients to earn some money by working without losing their benefits:
- Trial Work Periods (TWP)
- Extended Periods of Eligibility (EPE)
Trial Work Periods
Trial Work Periods (TWP) is a program established to encourage SSDI recipients whose impaired condition may have improved significantly to try returning to work without risking the loss of their benefits. In the past, many people avoided attempting to return to work for fear that they would jeopardize their SSDI benefits if working did not prove feasible.
Now, with the TWP program, an SSDI recipient may work nine months within a five-year period and earn an unlimited amount of income while continuing to collect monthly SSDI benefits. The nine months need not be consecutive; they may be spread over the five years if necessary.
Extended Periods of Eligibility (EPE)
Following the completion of the nine months worked in the TWP program, a worker on SSDI can continue to work. For any month during the EPE period in which the worker makes less than the SGA cap ($1,150 in 2024), they will be eligible for their full SSDI benefit. The EPE lasts for 36 months after the end of the TWP period.
Who Can Collect Unemployment Benefits While Receiving SSDI?
There is an obvious contradiction between claiming you are unable to work due to a disability and also claiming you are able and available to work to collect unemployment benefits.
However, in some cases, circumstances can allow a person to receive both SSDI and unemployment benefits. The keys to determining whether you can receive both SSDI and unemployment benefits are the following:
- The rules in the state where you live
- The amount of your SSDI benefits
- The number of hours and amount of wages you earned working while on SSDI.
State of Residence: First, let’s discuss the significance of your state of residence. Unemployment Insurance (UI) benefits are state-run programs with their own individual sets of laws and rules. Eligibility may be limited to only full-time workers and eligibility may also require that the UI applicant was earning at least a minimum income during a set number of previous months.
The Amount of Your SSDI Benefits: The amount of each worker’s monthly SSDI benefits is determined by a number of factors, most importantly by the amount of income they paid taxes on over the course of more than ten years of employment. Remember that the amount of UI benefits someone may receive depends on the amount of their usual wages.
History of Earnings and SSDI and Unemployment
If your long working history includes a history of relatively low income, your SSDI benefits are also going to reflect that fact. Social Security Disability Insurance permits you to earn up to $1549 of “countable income” per month without losing your benefits.
Suppose a worker earned $1535 per month working while receiving SSDI. Suppose also that this person has maintained that pattern for 15 months and they live in a state that grants unemployment benefits to part-time workers who are laid off.
If UI benefits are equal to 60 percent of your usual wages, or $921 per month ($1,535 x .60), and the person’s monthly SSDI benefit is $520, then the person may be eligible to receive the difference of $401 in UI benefits. All of these variable factors require checking with your own state’s unemployment agency to clarify who is eligible for that state’s UI benefits.
Check with Our Experienced Disability Law Firm Anywhere in the U.S.
The Clauson Law Firm represents disability claims for people in all 50 states, not just in North Carolina. Our entire team of highly trained disability lawyers and advocates can answer your questions about Social Security Disability (SSDI or SSD) and Supplemental Security Income (SSI).
If you think you may be eligible for SSDI or SSI benefits, contact Clauson Law to find out. Have you been denied disability benefits? Call us today before your appeal period expires. We handle disability claims from the very beginning of the process through to the end.
