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Double Dipping: Unemployment Compensation and Other Benefits

In the episode of the Seinfeld television series called “The Implant,” George is spotted dipping the same potato chip into dip more than once after taking a bite out of it. Annoyed, his girlfriend’s brother, Timmy, approaches him, interrogates him about his “double dip,” and scolds him sharply, saying “just take one dip and end it!” Timmy’s admonition to George may not just apply to those attempting to enjoy a second bite of a dip-covered potato chip, but also to those who collect some other sort of disability benefit while also attempting to collect unemployment compensation (hereinafter “UC”) benefits.

Before moving forward, for the sake of clarity, any references to social security benefits (“SBB”) herein will not refer to the collection of the social security pension benefits (hereinafter “SSPB”) due to one reaching a certain age. There is no conflict between collecting a SSPB and UC at the same time as long as each agency is appraised of the income received from the other.

When comparing UC and SSB, a baseline principle was enunciated by the court when it declared “[u]nemployment compensation is not health insurance and does not cover physically or mentally ill persons during periods they are unemployable.” Carter v. Com, 442 A.2d 1245. In other words, in order to collect UC one must be able and willing to work. However, when applying for SSB, one must allege to the Social Security Administration (hereinafter “SSA”) that s/he is completely disabled as to not be able to work at all to be eligible for benefits. Obviously, a conflict arises between the requirements for UC and SSB: if someone is completely disabled as to render him/her unable to do any work s/he is, by definition, not eligible for UC benefits, although s/he may be eligible for SSB benefits of some sort. In saying that, in practical terms, it is highly doubtful that an employer in a UC matter will request discovery or cross-examine a claimant on the issue of what s/he indicated on an application for SSB benefits. Therefore, many cases may be slipping through the cracks simply because there is incomplete analysis into a claimant’s dealings with the SSA.

Although in the typical case one cannot lawfully collect both UC and SSB simultaneously due to the fact that the requirements for each diametrically conflict, there is an exception where someone can collect both UC and SSB. The exception centers on the definition of “substantial gainful activity” (“SGA”). Under the rules of the SSA, someone can work and receive an income and still be eligible to receive SSB as long as his/her work and income are not SGA due to the claimant’s disability. Much case law has developed over time to determine what SGA exactly is and is not, but at least in terms of income, it is clear. The maximum income one can receive at one’s job before it becomes SGA is determined per the national average wage index, which currently stands at +/-$980/mo. Therefore, by way of example, a person legally determined to be disabled can work part-time at his/her local McDonald’s earning $750/mo. That same person may also be eligible for SSB because s/he makes less than the SGA minimum of $980/mo and can prove s/he has a disability which prevents him/her from being able to do work that qualifies as SGA. If s/he loses his/her McDonald’s job due to no fault of his/her own, and is ready and able to work again at the same or similar job, s/he can apply for and receive UC benefits. S/he may then receive both UC and SSB presuming s/he meets the requirements for UC. As always, s/he will have to inform SSA of his/her UC benefits.

In terms of private disability, one can collect UC and private disability at the same time. Again, UC must be informed of the disability income and the claimant must still be ready and able to work. As with SSB, the possible issue that arises is whether the claimant is disabled. Each private disability insurer has a different definition/standard of what disability is; therefore, not all private disability insurers have definitions/standards for disability that would conflict with the UC definition/standard of being ready and able to work. As with SSB, it is unlikely that an employer in a UC matter would delve into what the claimant indicated on his/her private disability application. However, if UC rules that the claimant’s disability is such that s/he cannot work any job, then s/he will be ineligible for UC benefits. By contrast, if the claimant can work at some sort of job, just not necessarily the same one s/he left, then UC benefits may be awarded absent any other reason for ineligibility.

When it comes to sick leave and/or having to quit a job due to a health reason (physical or mental), a claimant must first inform his/her employer of the condition to allow the employer to make an attempt at an accommodation (as a brief aside, it should be noted that how exactly one goes about informing one’s employer of one’s condition, and who has the right to see the information provided, is a process that is heavily regulated by the Family Medical Leave Act and the Americans with Disabilities Act and will not be discussed herein). If the employer refuses to accommodate or cannot sufficiently accommodate, a claimant will be deemed to have been constructively discharged against his/her will and, therefore, eligible for UC if that same claimant can show s/he is still ready and able to work at some other job as long as his/her disability is or can be accommodated. Sometimes an employer can offer sick leave. If the sick leave is paid at normal salary, then UC benefits will be denied as the claimant’s income is stable. If unpaid or paid at less than normal salary, a claimant will only be eligible for benefits only if s/he maintains a relationship with his/her employer and intends to return to work at the end of the leave interval. In addition, Claimant would have to demonstrate s/he was given leave because of a health condition, which essentially constructively discharged him/her from his/her employment. In other words, the leave would have to be the employer’s method of accommodation of the disability which claimant accepts. The leave can be either under FMLA or any other sort of leave offered by employer. At the end of the leave, claimant would have to resume work or show that the accommodation was insufficient. In showing whether the accommodation was insufficient, Claimant must still be ready and able to find alternative employment to be UC eligible. If s/he cannot work any job, UC will deem him/her ineligible as not being ready and able to work. If, while out on leave, the position one expected to re-assume is eliminated, then the claimant will be considered to have been involuntarily discharged, making him/her eligible for UC, presuming s/he is ready and able to work.

In the current precarious economic climate, it is important to know one’s rights relative to what benefits one may be entitled to when unemployed. If one can receive more than one stream of benefits, the opportunity should be pursued. Perhaps Timmy was wrong; maybe one does not have to “end it” after dipping once.

This article was originally published in Upon Further Review on February 8, 2010 which you can see here or on my website here.

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