Understanding the Difference Between SSDI and Unemployment Benefits

SSDI (Social Security Disability Insurance)

SSDI provides financial assistance to people who can’t work because of a long-term or permanent disability. To qualify, you must prove to the SSA that you are unable to perform any substantial gainful activity (SGA) due to your medical condition.

In simple terms, applying for SSDI means you’re saying:

“I cannot work right now because of my disability.”

Unemployment Benefits

Unemployment benefits, on the other hand, are meant for people who are ready, willing, and able to work but have lost their job through no fault of their own. To collect unemployment in Massachusetts, you must be:

• Actively seeking employment,
• Available to accept suitable work, and
• Physically and mentally able to perform job duties.

Applying for unemployment means you’re telling the Massachusetts Department of Unemployment Assistance (DUA):

“I’m able to work and looking for a job.”

Why Combining SSDI and Unemployment Is Problematic

Since SSDI and unemployment require opposite statements about your ability to work, applying for both can create confusion or even lead to a denial.

The SSA may question your SSDI eligibility if you are simultaneously claiming unemployment benefits — because it appears you are saying both:

• “I can’t work,” and
• “I’m looking for work.”

That said, there are limited situations where you could potentially qualify for both.

When You Might Be Eligible for Both SSDI and Unemployment

While uncommon, there are scenarios in which someone in Massachusetts could receive both SSDI and unemployment benefits, including:

1. Part-Time or Reduced Work Capacity

If your disability prevents you from working full-time but allows you to perform limited or light-duty work, you might qualify for unemployment after losing such a job. However, your SSDI benefits could be affected if your income exceeds the Substantial Gainful Activity (SGA) limit (around $1,550 per month in 2025).

2. Pending SSDI Application

Some applicants apply for unemployment while waiting for their SSDI approval. Since SSDI decisions can take months or even years, unemployment benefits can provide short-term financial support during the wait. However, it’s important to be transparent about your situation when applying for either program.

3. Older Workers Near Retirement Age

In some cases, older workers (especially those over 60) may claim unemployment while also applying for SSDI if they believe their disability will permanently prevent them from returning to full-time work. Massachusetts does not automatically penalize such claims, but the SSA will still review them carefully.

How Receiving Unemployment Might Affect Your SSDI Case

Although receiving unemployment doesn’t automatically disqualify you from SSDI, it can raise red flags during the review process.

The SSA or an Administrative Law Judge (ALJ) may:

• Question the credibility of your disability claim,
• Request additional documentation explaining why you applied for unemployment,
• Ask whether your disability allows for limited types of work, or
• Delay the decision until your work capacity is clarified.

It’s crucial to have consistent, well-documented medical evidence showing that, even if you were looking for work, your disability made it very difficult or impossible to maintain employment.

Massachusetts-Specific Considerations

In Massachusetts, unemployment benefits are managed by the Department of Unemployment Assistance (DUA), while SSDI is a federal program run by the Social Security Administration (SSA).

The DUA does not automatically deny unemployment claims for people applying for SSDI, but it will still assess whether you meet the state’s “able and available to work” requirement. If you collect unemployment while waiting for SSDI, you must be truthful about your medical limitations when filing your weekly claims.

If you’re found to have made inconsistent statements — such as claiming to be both “fully disabled” and “ready to work” — you could face repayment demands, overpayment penalties, or denial of benefits.

Can You Collect SSI and Unemployment Together?

Unlike SSDI, Supplemental Security Income (SSI) is based on financial need rather than work history. Because SSI has strict income and asset limits, unemployment payments will typically reduce or eliminate your SSI eligibility during the months you receive them.

If you qualify for both SSDI and SSI, any unemployment income must be reported to the SSA immediately.

Best Practices if You’re Considering Both Benefits

If you’re in Massachusetts and think you might qualify for both SSDI and unemployment, keep these tips in mind:

• Be honest on all applications. Never claim to be “fully able to work” if your condition prevents you from doing so.
• Document your limitations clearly. Medical records should support any statements about your work restrictions.
• Consult with a disability lawyer. An experienced attorney can help you navigate both systems and avoid benefit conflicts.
• Don’t rely on unemployment as a long-term plan. SSDI is designed for lasting disabilities; unemployment is meant for short-term job loss.