Does Social Security Disability Count as Income for Unemployment?

It’s a question that comes up often. When you’re receiving Social Security Disability (SSD) benefits, do they count as income for determining if you qualify for unemployment? Or vice versa? What about VA disability? And what about other unemployment benefits, like Pandemic Unemployment Assistance?

Depending on your personal circumstances, these can be very complex questions to answer. Here’s what we can tell you, and where you can find the answers you’re looking for.

Do My Social Security Disability Benefits Count as Income for Unemployment?

Social Security benefits in general are considered “unearned income” and therefore are not technically considered for unemployment benefits, but there is a catch. According to the state of North Carolina:

“In order to qualify for (unemployment) benefits, you must be able to work. You are not able to work during any week that you are receiving or applying for benefits under any other state or federal law based on your temporary total or permanent total disability.”

In other words, to draw unemployment benefits, you must be actively searching for work – “ready, willing, and able to work” according to the rules. Meanwhile, drawing Social Security Disability benefits means you’re not able to do much or any work. It is very difficult to receive both of these benefits at once in North Carolina, and going about it the wrong way could lead to trouble.

Social Security Disability and the IRS
If you claim the earned income tax credit (EITC), SSD benefits are generally not counted as earned income.

SSD Benefits or Unemployment Benefits?

A lot of what you may be able to receive is going to depend on how and in what order you seek Disability benefits. You’ll need to weigh the advantages of each possible benefit before choosing a direction.

ABC: Another Benefit to Consider
If your disability springs from a work-related injury, your best option may be seeking workers’ compensation benefits. Consult an experienced workers’ compensation attorney. We work closely with our firm’s workers’ compensation department as needed to help our clients seek maximum benefits to help support their families.

Social Security officials reviewing Disability claims will want to know your Disability claim is true, and though the basic qualifications are straightforward, actually having benefits approved can be very difficult. It would likely benefit you to enlist an experienced Social Security Disability attorney to assist you in this process.

At the end of the day, understand what you’re asking for and weigh your options carefully. Unemployment is a temporary benefit with a finite life span. SSD benefits can be much longer in term, but may not pay as much in the short term depending on your circumstances. Consult an attorney and get the facts first.

Does VA Disability Count as Income for Unemployment?

Veterans Administration (VA) disability benefits are not generally counted as income for the purposes of state unemployment benefits. If eligible for both, you can draw your VA disability check and full unemployment benefits simultaneously. If you have questions about benefits compatibility, contact the VA or your North Carolina county service officer with the North Carolina Department of Veterans Affairs.

Does PUA Affect Social Security Disability Benefits?

Those on SSD benefits who lost a part-time job due to the COVID-19 pandemic may qualify for Pandemic Unemployment Assistance (PUA) if it is still available. PUA benefits were originally set to expire in 2020 and had no “ready, willing, and able to work” requirements for eligibility like traditional unemployment benefits. Depending on your state, PUA probably will not affect your SSD benefits as income from unemployment assistance generally does not count toward SSD income limits.

What About Supplemental Security Income (SSI) and Unemployment Benefits?

Much of what we said above regarding Social Security Disability benefits applies here. The same broad qualification complexities apply, and it is similarly difficult to qualify for both simultaneously in North Carolina.

Is unemployment considered SSI income? In a way, yes. You can theoretically receive unemployment benefits alongside SSI, but they are both generally considered unearned income, so the amount of SSI benefits will be reduced by unemployment benefits either on a dollar-for-dollar basis or entirely if an income threshold is met. Remember that North Carolina treats unemployment as incompatible with Social Security Disability or Supplemental Security Income, so attempting to get both benefits could lead to trouble (as stated previously).

Also, remember that SSI is a poverty program and subject to income, asset, and resource evaluations. As of 2022, the maximum benefit is $841 per month, but there are deductions based on household income and other factors. Income of any kind can reduce the SSI benefit.

If You Are Unsure What Benefits Are Compatible With Social Security Disability, Talk to a Lawyer

When in doubt, you should consult an experienced Social Security Disability attorney. If you are applying for or have been denied Social Security Disability benefits, we can help you unravel the red tape and seek the maximum possible combination of benefits. You can always take a little time to learn about Social Security Disability benefits, especially if you’re going to rely on them. If a question pops up, we’ll be here to help.

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About the Author

Rick Fleming practices Social Security Disability law at the Law Offices of James Scott Farrin. In addition to heading up the firm’s Social Security Disability Department, he is a North Carolina State Bar Board Certified Specialist in Social Security Disability Law and fluent in English and Spanish. Rick has received multiple Order of Service awards from the North Carolina Advocates for Justice, and he is an active board member of the National Organization of Social Security Claimants’ Representatives (NOSSCR). He currently holds the board-elected position of NOSSCR Treasurer, after completing a year serving as the organization’s Secretary.