You can collect both unemployment and Social Security, but your unemployment payments may be reduced or stopped depending on your age and how much you earned

The short answer is yes — there is no federal rule that automatically bars you from collecting unemployment insurance while you receive Social Security. However, the interaction between these two programs depends on your age and your recent work history. If you are under your full retirement age, some states reduce your unemployment check if you are also collecting Social Security retirement benefits. If you are collecting Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI), the rules are different and more restrictive.

The key issue is earnings limits. Social Security has strict rules about how much you can earn from work before your benefits are reduced. Unemployment insurance counts as income in most cases, which means it can trigger a reduction in your Social Security check. The exact impact depends on which Social Security program you are on, your age, and your state's unemployment rules.

Key Takeaways

  • If you are under your full retirement age and collecting Social Security retirement benefits, unemployment payments count as income and may reduce your monthly Social Security check.
  • If you are collecting SSDI or SSI, you generally cannot collect unemployment at the same time because both programs require you to be unable to work.
  • Some states have specific rules about how unemployment and Social Security interact, so you need to check with your state's unemployment office and the Social Security Administration.
  • You must report all income, including unemployment, to Social Security to avoid overpayments that you would have to repay later.

How Social Security Retirement Benefits and Unemployment Interact

If you are collecting Social Security retirement benefits before your full retirement age, the Social Security Administration applies an earnings test. This test reduces your benefit by $1 for every $2 you earn above a certain threshold. Unemployment insurance is treated as income for this purpose in most cases, which means it counts toward that earnings limit.

For example, if you are 62 and collecting Social Security retirement benefits, and you also receive unemployment, the total of both payments may push you over the annual earnings limit. When that happens, Social Security will reduce your monthly check. Once you reach your full retirement age, the earnings test no longer applies, and you can collect both unemployment and Social Security without a reduction to your Social Security payment.

The earnings threshold changes each year. You should contact the Social Security Administration directly or check their website to find the current year's limit, because it varies and affects how much of your unemployment will count against your benefits.

SSDI and SSI Recipients Cannot Collect Unemployment

If you are collecting Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI), you cannot collect unemployment at the same time. Both programs are based on the premise that you cannot work. Unemployment insurance is designed for people who are able and willing to work but cannot find a job. These two requirements are incompatible.

If you are on SSDI or SSI and you attempt to collect unemployment, you will be asked to choose one program or the other. The unemployment office will likely deny your claim if you state that you are unable to work. If you somehow receive both payments, Social Security will eventually discover the overpayment and you will be required to repay the money.

However, if you are on SSDI and you return to work, you may be able to transition off SSDI and onto unemployment if you lose that job. Social Security has work incentive programs designed to help people move from disability benefits back into the workforce, but the details depend on your specific situation.

State-Specific Rules and Variations

While federal law sets the basic framework, individual states administer unemployment insurance and may have their own rules about how unemployment interacts with Social Security. Some states treat unemployment as unearned income, while others may have different calculations. A few states have specific language in their unemployment laws about Social Security recipients.

The best way to understand your state's rules is to contact your state's unemployment insurance office directly. They can tell you whether your unemployment payments will affect your Social Security, and by how much. You can usually reach your state unemployment office through your state's labor department website or by calling the number on your unemployment paperwork.

Reporting Requirements and Avoiding Overpayments

You are required to report all income to Social Security, including unemployment insurance payments. If you do not report unemployment, Social Security may overpay you — meaning you receive more than you are may have access to to. When Social Security discovers the overpayment, you will have to repay the entire amount, which can be a significant sum if the overpayment lasted several months.

When you start collecting unemployment, notify Social Security in writing or through their online portal. Include the amount of your weekly unemployment check and the date you started receiving it. Social Security will then recalculate your benefit to account for the additional income. This may reduce your monthly check, but it prevents you from owing money later.

Keep records of all unemployment payments you receive. When you file your taxes, unemployment is taxable income, and you will receive a Form 1099-G from your state showing the total you received. Having clear records helps you verify that Social Security has the correct information.

What Happens When You Reach Full Retirement Age

Once you reach your full retirement age, the earnings test no longer applies to your Social Security retirement benefits. This means you can collect both unemployment and Social Security without any reduction to your Social Security payment, regardless of how much unemployment you receive. Your full retirement age depends on the year you were born and ranges from 66 to 67 for most people born after 1954.

If you are still working or collecting unemployment when you reach full retirement age, Social Security will automatically stop explore the earnings test. You do not need to contact them, but you should still report all income for tax purposes and to keep your records accurate.

How to Report Your Situation to Both Programs

Start by contacting the Social Security Administration and telling them you are collecting or about to collect unemployment. You can do this by calling 1-800-772-1213, visiting your local Social Security office, or using their online account at ssa.gov. Have your unemployment paperwork ready so you can provide accurate information about the amount and start date.

Next, contact your state's unemployment office and inform them that you are collecting Social Security. They will ask whether you are on retirement benefits, SSDI, or SSI. If you are on SSDI or SSI, they will likely deny your unemployment claim or ask you to clarify your work status. If you are on retirement benefits, they will note this in your file and may adjust your unemployment payments if your state has specific rules about this situation.

Keep copies of all correspondence with both agencies. If there is ever a dispute about payments or overpayments, having documentation of what you reported and when will protect you.

Frequently Asked Questions

Will collecting unemployment reduce my Social Security check?

It depends on your age and which Social Security program you are on. If you are under your full retirement age and collecting Social Security retirement benefits, unemployment counts as income and may reduce your check. If you are on SSDI or SSI, you cannot collect unemployment. Once you reach full retirement age, unemployment does not reduce your Social Security retirement benefits.

What if I did not report my unemployment to Social Security?

Social Security will eventually discover the unreported income through their records or when you file taxes. You will owe back the overpayment in full. It is better to report it when ready and have your benefits adjusted than to face a large repayment demand later.

Can I collect unemployment if I am on disability?

No. SSDI and SSI are both based on the premise that you cannot work. Unemployment requires you to be able and willing to work. You cannot collect both at the same time.

Do I have to choose between unemployment and Social Security?

Not if you are on Social Security retirement benefits — you can collect both, though your Social Security may be reduced if you are under full retirement age. If you are on SSDI or SSI, you effectively have to choose, because the programs are incompatible.

What is the earnings limit for Social Security in 2024?

The earnings limit changes each year. Contact the Social Security Administration at 1-800-772-1213 or visit ssa.gov to find the current year's limit. The limit is different depending on whether you have reached your full retirement age yet.