An individual can collect unemployment benefits and Social Security benefits at the same time. The term unemployment benefits covers regular unemployment insurance (UI) from the worker's state, as well as an extension of UI benefits provided by that state. It also covers payments for an unemployed person which flow through their state but are funded by the federal government in response to the COVID-19 pandemic.
Two coronavirus-related programs that provide unemployment benefits are Pandemic Emergency Unemployment Compensation (PEUC) and Pandemic Unemployment Assistance (PUA). PEUC is for workers who were laid off or saw a substantial reduction in hours. PUA is for self-employed people and independent contractors. An individual who was receiving UI, an extension of UI and then PEUC is typically eligible for PUA after their PEUC is exhausted.
What Is Social Security?
There are two basic types of Social Security benefits: Social Security for old age and Social Security for a disability. Both programs are administered through the Social Security Administration (SSA), a federal agency. Social Security for old age is meant to provide older adults with a source of income when they retire. The funds come from taxes paid into a trust for those who are eligible.
Social Security disability benefits, sometimes called Social Security Disability Insurance (SSDI), also come from taxes paid into a trust for those who are eligible. Determining factors for eligibility are whether the person worked in a job covered by Social Security or has a medical condition that meets the definition of a disability. The SSA usually pays monthly benefits to people who cannot work for a year or more due to their disability. SSDI benefits typically continue until a person can return to regular work.
Definition of Supplemental Security Income
Supplemental Security Income (SSI) is a federal income supplement program that is not funded by Social Security taxes. Instead, the money comes from general tax revenues. The program is designed to help individuals who are older, have blindness or another disability and have little to no income. The SSI benefit program provides cash for basic needs like food, clothing and shelter.
Collecting Both Types of Benefits
The reason a person is eligible to both draw unemployment insurance benefits and Social Security retirement benefits for old age is that only income from work counts against the earnings test for unemployment benefits. Social Security benefits for old age are not wages, and unemployment benefits are not counted as wages under Social Security’s annual earnings limit.
SSDI and Unemployment Benefits
An individual can draw Social Security Disability Insurance and unemployment benefits at the same time. The two allotments do not reduce one another. There is a concern that unemployment benefit programs usually require an individual to be actively looking for work, but the exception is during the COVID-19 pandemic. During this period, the novel coronavirus remains such a danger that many states have waived the requirement of a weekly work search.
In contrast, SSDI requires an individual to be mostly unable to work. A Social Security officer reviewing a disability claim can examine whether the claimant received or applied for unemployment benefits. The claimant may be required to show why they deserved SSDI and unemployment benefits at the same time. An individual can draw on SSI and unemployment benefits without reducing either amount.
Minnesota Has Unique Rules
Minnesota is the only state where collecting Social Security monthly payments will reduce the amount of unemployment benefits. The date on which the UI claimant began receiving Social Security, and the date on which they filed for unemployment benefits are important. If the effective date of the Social Security claim for old age benefits is before the start of the person's UI base period, the Social Security payment will not affect unemployment benefit payments. If the effective date of the Social Security claim is after the start of the base period, half of the weekly Social Security amount will be deducted from the benefit payment.
With respect to Social Security disability benefits, if the effective date of the Social Security disability claim is before the start of the base period, the Social Security payment does not affect unemployment benefit payments. If the effective date of the Social Security disability claim is after the start of the base period, half of the current or potential Social Security disability benefit is deducted from the benefit payment. Claimants must provide medical evidence that they are able to work. In Minnesota, SSI and survivor’s or dependent Social Security benefits do not reduce unemployment benefit payments.
Social Security and Noncitizens
A person who is not a U.S. citizen, but in the U.S. legally, may be eligible for Social Security benefits under certain circumstances. The noncitizen should apply for public benefits like Social Security through the Systematic Alien Verification for Entitlements (SAVE) program.
A noncitizen may also be eligible for SSI. They must fit one or more of seven qualifying alien categories to receive SSI. The categories include being a person who is lawfully admitted for permanent residence (LAPR), a refugee, or someone granted asylum. A noncitizen must meet other rules for SSI eligibility, including limits on income and resources.
When a noncitizen has a sponsor, the Social Security Administration generally counts the sponsor’s income and resources as the applicant’s income and resources.
Return to Work
An individual may want to voluntarily suspend Social Security old age benefits if they return to part-time or full-time work because the individual will be offered the incentive of earning delayed retirement credits. The credits will boost their Social Security payment when they resume collecting benefits. An individual can voluntarily suspend their Social Security old age benefits when they reach full retirement age (FRA).
Full retirement age is the age at which a worker can first claim full, or unreduced, Social Security old age benefits. An individual’s FRA depends on their birth year. Federal legislation enacted in 1983 is gradually increasing the FRA from 65 to 67. The FRA for individuals born in 1959 is 66 and 10 months. The FRA will reach 67 for workers born in 1960 or later. An individual must start or resume collecting benefits by age 70.
- Usa.gov: Top Questions About Social Security
- Social Security Administration: Disability Benefits, How You Qualify
- Social Security Administration: Spotlight on SSI Benefits for Aliens - 2020 Edition
- Minnesota Unemployment Insurance: Other Income, Income That Delays or Reduces Payment
- Social Security Administration: What Is Supplemental Security Income?
- Congressional Research Service: The Social Security Retirement Age
- U.S. Citizenship and Immigration Services: Information for Noncitizens Applying for a Public Benefit
Jessica Zimmer is a journalist and attorney based in northern California. She has practiced in a wide variety of fields, including criminal defense, property law, immigration, employment law, and family law.