With the country in a state of emergency due to the COVID-19 pandemic, many people have been laid off from work indefinitely. The days are turning into weeks. The weeks are turning into months. People who have not been able to work have exhausted their savings and now have to look for other ways to pay their bills. This situation is causing a rise in unemployment and disability claims nationwide. In this article, we will highlight the causes of rising unemployment and disability claim numbers, how it works when you file for long term disability and unemployment, and what you can do to build a strong claim.
Why So Many Unemployment Claims?
The number of people applying for disability and unemployment benefits is rising again. With the uncertainty that COVID-19 is causing in our economy, the number is likely to grow continuously until the government has a better handle on the situation. Across America, stores are closing their storefronts, using online, pick-up-only options, or closing altogether. Florida Governor Ron DeSantis has closed all the beaches in Florida, negatively affecting businesses like hotels, restaurants, and bars that depend on tourism income to stay in business. Closures like these are happening nationwide, and as a result, many individuals cannot work.
The Recession Effect
A recession is the biggest cause of a rise in unemployment and disability claims. A 2015 study by a group of economists measured the number of claims during The Great Recession from 2006 to 2012. The study results showed that the number of unemployed people rose, and so did claims for unemployment benefits and disability insurance benefits. The data also showed that 99% of all disability claims were denied on the initial filing. This was an effort to separate the people who were genuinely unable to work as a result of a disability from the people who were looking to supplement their income during the recession.
The Pandemic Effect
With so much uncertainty, unemployment claims have been spiking, especially in the areas hit the hardest by COVID-19. The director of the labor bureau in NY reported that the unemployment benefits hotline received 7.8 million calls last week. They are facing a massive backlog of claims by bartenders, waitresses, and other service industries concerned about how long they will be unable to work due to the pandemic and how they plan to cover rent.
This isn’t the first time a pandemic has caused a crisis. During the 1918 Influenza Pandemic, tens of thousands died, and millions were affected. A research report called Economic Effects of the 1918 Influenza Pandemic, written by Thomas Garrett, Economist for Federal Reserve Bank of St. Louis in 2007, recalls how people became unemployed following the flu outbreak. In eerie detail, it nearly mimics the COVID-19 pandemic we are dealing with today.
You also see a trend of conditional applicants. These people previously suffered from underlying health problems but would prefer to continue working, so they put off whatever surgeries or other treatment plans their doctors have recommended. These applicants would most likely qualify for benefits and now have decided it’s time to file since they cannot work for other reasons.
However, the claims process is long and tedious. Data shows a high level of claims denied, which is interpreted as correlating to the high number of workers applying. Many applicants abandon the process and return to the workforce because of the strict application process and no work policies.
During this social isolation period, the CDC recommends that people stay indoors. For people who already have a mental illness like depression and anxiety, this can trigger them into a mental health crisis. Social isolation in the older population is more severe. Social isolation affects your heart, lungs, and joints adversely. As more people experience mental health issues due to this period of unemployment and isolation, we can expect a rise in claims accordingly. If you cannot perform your job due to a mental health condition, you may qualify for unemployment benefits or disability payments.
The Medical Advancement Effect
The advances in modern medicine continue to improve the overall quality of life for millions of people every year. But just because you survived an injury or illness that would have otherwise killed you 50 years ago doesn’t mean you are symptom-free. Soldiers returning from war with limbs missing and traumatic brain injuries still suffer from lifelong struggles with finding meaningful work. Older adults who have joint replacement surgeries may still live with chronic pain.
How Will This Affect You?
Historical data shows that during a significant economic crisis, a disproportionate number of disability claims will be denied the first time they are filed. This is a calculated effort by the government and insurance companies to weed out the people who are only filing as a way to have income temporarily and are not truly disabled. A person who is genuinely disabled will probably be denied as well. Disabled workers can expect to endure more denials, longer wait times for approval, and lots of claim scrutiny.
Can I Apply For Unemployment and Disability Benefits?
The simple answer is yes. You can apply to receive unemployment and disability benefits. If you are currently receiving unemployment and you have an active disability insurance policy, you can still file a claim.
However, the two programs have different goals. Unemployment benefits are designed for people who are ready, willing, and able to work but have lost their job through no fault of their own. Social Security Disability benefits and long term disability benefits are designed for people who cannot work due to an illness or injury.
Due to the different eligibility requirements, it’s unlikely that you will be approved for both claims simultaneously. After you file for disability, you will need to notify the Department of Labor that you can no longer work.
Problems With Applying for Both Unemployment and Disability Benefits
A couple of problems can arise from you applying for unemployment benefits and disability benefits.
The first problem is your disability insurance provider may use your unemployment benefits claim against you. If you are receiving unemployment benefits, you are essentially stating that you are ready, willing, and able to work. If that is the case, you don’t need long term disability benefits. Likewise, your state unemployment agency may assume that you are dishonest about your ability to work because you have applied for long term disability benefits. This problem could undermine your credibility and jeopardize both your claims.
The second problem is the offsets. When you receive long term disability benefits from a private insurance company, they have the legal right to use offsets when issuing your monthly payments. Offsets are defined as “other income from other sources.” Examples include Social Security Disability benefits, third-party settlements, and unemployment benefits. An example of this would be you are approved to receive $1,000 a month for long term disability. You are currently receiving $120 per week through unemployment benefits. Since you now receive an estimated $480 per month in unemployment, your check for long term disability will only be $520 instead of $1,000.
Exception for Partial Disability
There is an exception to this rule. If you are receiving partial benefits for long term disability, you may qualify for unemployment and disability under the pretext that you are only partially disabled.
How to Build A Strong Claim
Keep A Journal
Keeping a detailed log of everything surrounding your disability is very important. When insurance companies receive thousands of calls a day and handle just as many initial claims, things tend to get lost. If you have a written record of your symptoms, your phone conversations, your emails and letters, and your appointments, you will be able to answer any questions the insurance company may have, which is critical to building a strong claim.
Consult A Disability Lawyer
With so many variables involved in getting approved for a disability during a time of high unemployment, the best thing you could do is consult with an experienced disability lawyer. Experienced disability attorneys do not get paid unless you do and have been through recessions before. They know how to navigate the complicated claims process for you.
If you are filing a new claim during a period of high unemployment, consult with an experienced disability attorney to help you build a strong claim. The Ortiz Law Firm offers a free consultation with no obligation to use our firm. Call (888) 321-8131 and let us help you move your claim forward.