Collecting Unemployment & Social Security
Anyone considering an application for unemployment benefits should consider the effect of Social Security retirement or disability earnings. Laws vary in each state, but the fact that you are earning Social Security benefits could affect your application and your benefit amount. For the Social Security Administration, unemployment benefits may affect your approval for benefits, depending on what kind of benefits you are seeking.
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Unemployment Applications
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States provide unemployment insurance to those workers actively seeking but unable to find gainful employment. The application includes information on any income you are earning, either through self-employment or through a public agency such as the Social Security Administration. Earning disability or retirement benefits may disqualify you from unemployment, or may result in an offset, in which the monthly SSA earnings are subtracted from your unemployment check.
Social Security Retirement
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Your age and work history qualifies you for Social Security retirement benefits, starting with early retirement for workers applying at age 62. Since you have earned these benefits through your work record, drawing unemployment will not disqualify you or affect the amount of your Social Security check. The benefit amount depends on your work history and the Social Security taxes you paid in while you were working.
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Social Security Disability
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The Social Security disability program provides monthly benefits to workers who have suffered a serious illness or injury and as a result are unable to find or keep gainful employment. By claiming you are disabled, you are also claiming you cannot work; by claiming unemployment benefits, you claim you are actively seeking work but unable to find it. An unemployment claim is testimony that you are physically able to work, and will disqualify you for Social Security disability benefits.
Income Taxes
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Social Security retirement and disability benefits are considered income by the Internal Revenue Service, and up to 84 percent of your benefit amount is taxable at your standard income tax rate, depending on the level of your gross income. Social Security does not withhold income taxes from benefit checks. State and federal unemployment benefits are considered income by the IRS and have been fully taxable since 1987, although in 2009 the first $2,400 in unemployment was excluded. In some states you may request withholding on your unemployment checks, or pay quarterly estimated taxes on your own.
Supplemental Security Income
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The Supplemental Security Income program administered by the Social Security Administration provides benefits to the disabled, who must meet strict income and asset limits in order to qualify. Unemployment benefits are considered nonwage income; individuals earning more than $694 and couples earning more than $1,031 in nonwage income are disqualified from SSI benefits.
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References
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