Can I Apply for Unemployment and Long-Term Disability Benefits?

It is not that uncommon for someone to apply for unemployment benefits and long term disability benefits. But can you?

Generally, someone who is receiving long-term disability (LTD) benefits cannot receive unemployment benefits at the same time because of the basic purpose of each benefit. LTD benefits are for individuals who are unable to work because they are disabled due to illness or injury. Unemployment benefits, on the other hand, are for individuals who are ready, willing, and able to work but cannot find a job.

Two Opposite Positions?

Virtually all long-term disability insurance carriers and claims administrators will use your application for unemployment benefits against you. Often, disability insurance companies interpret your applying for and/or receiving unemployment benefits as evidence that you believe you can work. They may also claim you lack credibility because you are maintaining two opposite positions of your ability to return to the workforce.

In short, you are telling the disability insurance company you cannot work because you are disabled while telling the unemployment agency you are ready and able to work but cannot find a job.

Disability Insurance Benefits Denied Because you Applied for Unemployment Benefits?

If your disability insurance company denied your benefits because you receive or applied for unemployment benefits, you can fight back. What truly matters is whether you are disabled under the terms of the disability policy, not whether you made a mistake in applying for some other benefit. Fortunately, courts agree. Courts have ruled that receiving unemployment benefits does not give insurance companies an excuse not to pay valid disability claims.

Offset for Unemployment Benefits

Most long-term disability insurance policies have an offset, or deduction, for other income benefits. Other income benefits are generally social security disability income, workers’ compensation benefits, third-party settlements, and unemployment benefits. If you receive unemployment benefits during the same time period you are receiving disability benefits, the insurance company will likely reduce your monthly benefit by the amount received from the unemployment agency.

Our Disability Insurance Attorneys Can Help

If you or someone you know is worried that filing for unemployment benefits can ruin your long-term disability case, call to speak with our experienced disability insurance lawyers. As a law firm focused only on disability insurance, we have helped hundreds of clients over the years get long term disability benefits approved, even those that have received unemployment benefits.


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