Unemployment Benefits: How They Can Affect a Claim for Social Security Disability Benefits

Applying for and receiving unemployment benefits can pose a problem, especially if you have a claim for Social Security Disability (SSD) or Supplemental Security Income (SSI).  By applying for both sets of benefits, you are making two statements that are rather contradictory. First, by applying for and receiving unemployment benefits, you are claiming that you are able to work, but you are unable to find employment. By then applying for Social Security Disability or Supplemental Security Insurance benefits, you would be indicating that you are unable to perform any type of work as a result of a disability that has lasted, or is expected to last, at least twelve-months. Indicating that you are both able to work and unable to work simultaneously. Because these two statements contradict one another, it can lead to problems of credibility with regards to your disability. More specifically, if you indicate to one government agency that you can work, and then indicate to another that you cannot, an Administrative Law Judge may find your testimony regarding your claimed disability to be less credible.  

The good news, however, can be found in a memo that was issued on August 9, 2010. Therein, Frank A. Cristaudo, former Chief Administrative Law Judge, provided a reminder to all Administrative Law Judges that stated, “Receipt of unemployment benefits does not preclude the receipt of Social Security disability benefits. The receipt of unemployment benefits is only one of many factors that must be considered in determining whether the claimant is disabled.” So, what does this mean? Well, simply put, it means that while applying for and receiving unemployment benefits does not automatically preclude you from receiving SSD or SSI benefits, it will be one of the many factors and Administrative Law Judge will take into consideration when determining if you qualify to receive said benefits.

A New Year

Last year brought a lot of new and interesting discussions to our blogs (here and here). We offered a plethora of information to help our clients through the Social Security Disability process, and we plan to continue to do so! But, before we get a jump start on this New Year—let’s look back on some of the important topics from last year.

Electronic Social Security Disability Checks—Last May, we blogged about the end of an era. At that time, we mentioned that (in less than two years!) the Social Security Administration was no longer going to be issuing disability payments in the form of paper checks. In an attempt to cut costs, the SSA will soon be switching over to fully-electronic direct deposits for disability payments. The upside to electronic payments still remains…Electronic payments will almost guarantee that one's payment cannot be misplaced, sent to the wrong address, ruined in the rain, or eaten by the dog!

The threat of a possible Governmental Shutdown lead to a discussion about Governmental Budget Woes…Again—These types of blogs are never our favorite to write; there is nothing appealing about being the bearer of bad news! But, we were happy to report that they government did not, in fact, shut down. The ‘budget woes,’ on the other hand, are still an issue. We want to reassure our clients that, regardless of any outside factors—governmental, or otherwise, we will continue to operate as normal. At Binder & Binder®, it’s business as usual, and we’re going to continue working hard for our clients regardless of what happens.

Social Security Disability Case Stages—We know how long and difficult the Social Security Disability process can be. We took the time to break down the process, explain each stage in the game, and provide estimated time frames for the stages according to information from the Social Security Administration. The Social Security Disability Process, when broken down into the individual stages, consists of the Initial Application, Reconsideration, Hearing, and Appeals Council. Using the highest averaged amount of time per stage, the SSA averaged that some claims can take over 3 years before a final decision is rendered.

Most recently, we blogged about future changes to the Social Security Administration that were In The News—Due to recent controversy over a number of speculated flaws with the system, the SSA indicated they were going to commission an independent review of the system. With any luck, the review of the system would take a deeper look at the extreme inconsistency in benefit award rates that exist from one Administrative Law Judge to the next. Recommendations for improvement as a result of the review are expect to be available sometime this year.

The New Year is bound to bring new updates, new blogs, and new stories from us—be sure to check in often to stay up-to-date!

In The News

Recent announcements regarding the Social Security Administration (SSA) have indicated that an independent review of the system is set to take place soon. Without doubt, there has been a great deal of speculation in the past with regards to numerous presumed flaws in the federal disability program—and the proposed study will undertake a review of approximately 1,500 Administrative Law Judges (ALJs) with various award-rating backgrounds (or rather, ALJs with award rates ranging from extremely high to extremely low). Of the numerous presumed flaws in the SSA’s disability program, the extreme inconsistency in benefit award rates that exist from one ALJ to the next has been a top headline for some time. Recommendations for improvement of the system are predicted to be available next year.

Additionally, the Social Security Administration has indicated that, beginning this week, they will no longer be notifying applicants and representatives which ALJ has been assigned to hear their case. Past speculation has indicated that some applicants and their representative have made attempts to change the ALJ assigned to their case in an effort to have their case wind up in the hands of the more compassionate and benefit-awarding judges.

The results of the study and the outcomes remain to be seen, but we plan to keep you up-to-date with any and all future developments.

Understanding Supplemental Security Income and Your Resources

Supplemental Security Income (SSI) pays monthly cash benefits to people who are age 65 or older, those who are blind or those who have a disability and who do not own much or have a lot of income. The standard of disability is the same as with Social Security Disability (SSD). However, to qualify for Supplemental Security Income, a financial need threshold must also be met. SSI kicks in for the disabled when they do not qualify for SSD or the amount of SSD they will receive puts them below the financial standard.

When evaluating whether or not you qualify for SSI, the Social Security Administration looks at your resources. Resources, for instance, can be items such as cash; bank accounts, stocks, and U.S. savings bonds; land; life insurance; personal property; and anything else you own which could be changed to cash and used for food or shelter. In order to qualify to receive SSI, in addition to meeting the disability requirements, your countable resources must not be worth more than $2,000 for an individual or $3,000 for a couple. It is the total value of your resources that, when combined, are one of the factors that determine your eligibility for benefits.

Not all resources count for SSI, however. For instance, the Social Security Administration does not count the following: the home you live in and the land it is on; household goods and personal effects (for example, your wedding and engagement rings); burial spaces for you or your immediate family, as well as burial funds for you and your spouse, each valued at $1,500 or less; and one vehicle, regardless of value, if it is used for transportation for you or a member of your household—just to name a few.

One thing to keep in mind is the possibility of a future transfer of resources. Transferring a resource involves either giving it away or selling it. For example, an individual may, under their current circumstances, qualify for SSI benefits. However, a decision to transfer a resource may result in the ineligibility for SSI for up to 36 months. The length of time you would be ineligible for SSI is dependent upon the value of the resource that was transferred. Conversely, if the value of a resource that was transferred does not bring the total of your countable resources over the $2,000 limit for an individual or $3,000 limit for a couple, your eligibility would remain intact.

As always, we recognize that the circumstances are different for each of our clients, and we will do our best to make you aware of the process along the way. While we cannot change the Social Security Administrations requirements, we are always available to answer any questions our clients may have!

Location, Location, Location…

We’ve all heard that location plays a big role in certain things such as real estate. But, did you know if can play a role in your Social Security Disability process, too?  A recent article depicted the scene of a small rural town in Virginia that had a rate of more than one out of four working aged adults (ages 15 to 64) receiving Social Security Disability payments.

While the small town in Virginia carried a disability rate of over 25%, the average drops considerably just a short distance over in Washington D.C., where only 3.2% of the working age population is noted to be receiving Social Security Disability. A map, depicted below, shows the staggering difference throughout the United States.

Although the figures from one city to the next may be surprising, the explanation may not. The rural cities that happen to have the largest concentration of disability payments happen to be the cities where occupations require manual labor, such as mining and timbering. Urban areas, such as Washington D.C., where occupations tend to be less physically demanding and result in less disabling injuries.

                

Baby Boomers Playing a Role in the Social Security Disability Applicant Increase

In our last blog, we talked about the weak economy and unemployment rate and its effect on the rising number Social Security Disability claims. So, it may not come as much of a surprise to learn that there are numerous other factors at play in the lengthy process many individuals are a part of right now. Age, for instance, is playing a larger role than it has in the past. More specifically, the Baby Boomers are hitting the system…and they’re making an impact.

According to Patti Patterson, Social Security Administration regional communications director, “Baby boomers reaching their disability-prone years [and the economic downturn] have contributed to the increase in applications.” Despite strict requirements regarding disability requirements, the number of applicants has continued to rise in recent years. In fact, according to administration statistics, the number of applicants has risen nearly 30 percent in five years.

The figures, provided by the Social Security Administration, speak for themselves. In Fiscal Year 2006, over 2,500,000 individuals applied for Social Security Disability benefits, with just over 35 percent of applicants being awarded at the initial application level. Just five years later, in Fiscal Year 2011, the number of applicants had risen to just over 3,200,000. The rise in applicants did not coincide with a rise in the number of individuals whose applications were approved at the initial level, as that number dropped nearly 2 percent.

Despite the substantial growth, the average wait time for initial claims is slightly less, albeit by only 5 days, than it was 5 years ago. The Social Security Administration continues to revisit their plan to eliminate their hearing backlog, which provides hope for the individuals who find themselves still in the middle of the disability process. In the meantime, we continue to work hard for our clients to ensure that their cases are as strong as possible at every given stage.

A Rise in Social Security Disability Claims: What This Means For You

We’ve previously blogged about the estimated waiting times for the different stages in a Social Security Disability claim.  A recent rise in the number of Social Security Disability claims is partially to blame for the lengthy waiting time. But, what’s to blame for the recent rise? Claims for Social Security Disability Insurance in the U.S. have risen in the last three years, and some say the weak economy is a major reason.

Nationwide, the number of initial disability claims rose from about 2.6 million in the 2008 fiscal year to 3.16 million in the 2011 fiscal year. Filing for disability might now offer the best option for individuals who, in better times, would continue working, or continue looking for work. In better economic times, individuals who might have qualified for Social Security disability might have chosen to work despite health problems because job income often pays far better.

In the last three years, however, with unemployment rising, some individuals who lost their jobs may have viewed the insurance program as a potential financial backstop. Disabled individuals, who might have sought out alternative employment opportunities despite their health problems, are finding fewer options available for them in the workforce. The increase in applications that have stemmed from the rising unemployment rate have had an undoubted effect on the Social Security Disability claim process. Despite any new hurdles that may present themselves as a result, we want our clients to know that we will continue to take over the burden of making the benefits process work for them.