Are Social Security Disability And Unemployment The Same?

by Oct 19, 2018General

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Both unemployment and Social Security disability can provide much-needed income if an injury or illness puts you out of work. But they are not the same thing.

Unemployment is a temporary benefit program for workers who lose their jobs. Social Security disability is a federal program providing benefits to workers who are disabled and can no longer work.

If you have been injured and cannot work, you might be eligible for both unemployment and Social Security disability, but there could be risks to collecting both benefits. A Social Security Disability lawyer from the Disability Advantage Group can help you figure out the best way forward in your case.

For a free case evaluation, call us at 865-566-0800.

How Unemployment Works

Unemployment insurance pays weekly benefits to workers who lose their jobs. Any worker who loses their job can file for unemployment insurance if they did not quit voluntarily or get fired for misconduct.

Each of the 50 states, as well as Washington, D.C., Puerto Rico, and the U.S. Virgin Islands, runs its own unemployment insurance program. The amount of weekly unemployment benefits depends in large part on your state. Some, such as Massachusetts, pay a maximum of $750 a week or more. Others, such as Mississippi, pay less than $250 a week.

How Unemployment Gets Funded

State governments fund unemployment insurance. Like all levels of government, they get the money from taxes. Specifically, states levy payroll taxes against employers. For each paycheck an employer writes to an employee, it must pay a certain amount in taxes. This money enters an insurance “pool,” similar to the premiums you pay for your car or health insurance.

When an employee loses their job, they can make a claim with their state’s unemployment office. If approved, they begin receiving monthly benefits. The amount is based on the amount of money they were making before losing their job, up to the state’s maximum.

How Social Security Disability Works

Social Security disability is a government-run disability insurance program operated at the federal level. It provides a monthly check to workers who are disabled and can no longer work. The disability does not have to be work-related. (Another insurance program, workers’ compensation, provides benefits for on-the-job injuries).

When an employee can no longer work because of an injury or illness, they can file a disability claim with Social Security. To get approved, the worker needs to attach to their claim sufficient proof of a disabling condition that meets Social Security’s criteria. A Social Security disability lawyer can help with the process.

How Social Security Disability Gets Funded

Similar to unemployment insurance, Social Security disability is a government-run insurance program funded by taxes. If you look at your pay stub, you will probably see that you pay three different taxes at the federal level: federal income tax, Social Security tax, and Medicare tax. As you might suspect, your Social Security tax contributions help fund the disability program.

The amount you can receive in Social Security disability depends on how many years you have worked (i.e., how many work credits you have) and how much you paid in Social Security taxes during those years.

Receiving Both Unemployment and Social Security Disability

It may be possible to collect unemployment and Social Security disability at the same time. It depends on your state of residence. In some states, your Social Security earnings count against your unemployment earnings. In these cases, the state will lower your unemployment compensation to account for the money you are receiving from Social Security.

In other states, there is no penalty for collecting Social Security while on unemployment. Your Social Security disability lawyer can review your situation.

If you have questions about applying for Social Security disability benefits, a lawyer can help. The Disability Advantage Group, offers a free case evaluation. We will review your situation and tell you what your options are. Call us at 865-566-0800.