Does Unemployment Count Against Social Security?
If you're unemployed through no fault of your own, you may qualify for unemployment benefits. Receiving unemployment benefits does not affect your Social Security. If you've earned enough credits by working and paying into Social Security, you're entitled to benefits, regardless of any other income you may receive. Receiving Social Security, however, may lower the amount of unemployment benefits you receive.
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Qualifying for Social Security
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Social Security benefits are based on your work history. You must have earned at least 40 credits to qualify for retirement benefits. Credits are awarded according to how much you earn, and you can earn up to four credits each year. As of 2011, you earn one credit for each $1,120 you earn. You can receive a reduced benefit amount when you reach age 62, or you can wait and receive your full benefits starting at age 66 if you were born from 1943 to 1959 or 67 if you were born in 1960 or later.
Qualifying for Unemployment
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To receive unemployment, you must be unemployed through no fault of your own, such as being laid off. You also must meet minimum wage requirements, which vary depending on the state where you worked. Your unemployment benefits are based on your recent work history and are lowered in proportion to any other benefits you receive, including Social Security. If you don't report all your income, you may receive more unemployment than you're entitled to and you'll be required to repay any overpayment.
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Unemployment Taxes
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Unemployment benefits also don't count toward your Social Security earnings, as Social Security taxes aren't withheld. You are required to pay federal taxes and you may owe state taxes as well, depending on the laws of the state where you're filing for unemployment. You can opt for taxes to be withheld from your unemployment benefits or you can receive your full unemployment benefits and pay your federal income tax when it's due.
Disability
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If you qualify for Social Security Disability benefits, you may not be eligible to receive unemployment benefits. One of the requirements for receiving unemployment is that you're physically able to work. To qualify for Social Security Disability benefits, you must be completely unable to work. If you're uncertain as to whether you qualify for unemployment, contact the unemployment office of the state where you worked for information. If you aren't receiving disability benefits but feel you may qualify, contact your local Social Security office to submit an application.
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References
- Social Security Online: Retirement Benefits
- Social Security Online: How You Earn Credits
- Social Security Online: Age to Receive Full Social Security Benefits
- United States Department of Labor: State Unemployment Insurance Benefits
- State of Wisconsin Department of Workforce Development: Unemployment Insurance Frequently Asked Questions
- Social Security Online: What We Mean By Disability
