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Income security > 8. Disability and Unemployment Benefits

Congress should consider passing legislation to prevent individuals from collecting both full Disability Insurance benefits and Unemployment Insurance benefits that cover the same period, which could save $1.2 billion over 10 years in the Social Security Disability Insurance program according to the Congressional Budget Office.

Why This Area Is Important

Disability Insurance (DI) and Unemployment Insurance (UI) provide important safety nets for U.S. workers who have lost their income. DI, administered by the Social Security Administration (SSA), is the nation’s largest cash-assistance program for workers with disabilities. DI benefits replace lost wages due to a disability that prevents work. Benefit amounts are determined based on an individual’s earnings history. In fiscal year 2010, more than 10 million beneficiaries received DI cash benefits totaling $121.6 billion. DI benefits are paid from the Federal Disability Insurance Trust Fund, and are financed by payroll taxes paid by covered workers and their employers, on the basis of each worker’s earnings history. 

The Department of Labor (DOL) oversees the federal-state UI program, which replaces wages when someone who is able to work loses a job through no fault of his or her own. States establish the amount of UI benefits based on the worker’s covered employment. UI benefits and administrative costs are financed primarily by taxes levied on employers paid into a federal Unemployment Trust Fund set aside for this purpose. In addition, federal law provides for extending the duration of UI benefits in periods of high and rising unemployment. In fiscal year 2010, 11.3 million beneficiaries received UI cash benefits totaling $156 billion, $93 billion of which was paid by the federal government.[1] Both the UI and DI trust funds face serious fiscal sustainability challenges, prompting the need to examine opportunities for potential cost savings.

[1]The federal portion is funded through a combination of payroll taxes and appropriated funds. Total benefits funded by the federal government vary depending on the level of claims filed.

What GAO Found

In July 2012, GAO reported that in fiscal year 2010, 117,000 individuals received concurrent cash benefit payments from the DI and UI programs of more than $850 million, which can occur because current law does not preclude the receipt of overlapping benefits. The 117,000 individuals GAO identified as receiving concurrent DI and UI benefits represented less than 1 percent of the total beneficiaries of both programs, but the cash benefits they received totaled over $281 million from DI and more than $575 million from UI in fiscal year 2010. These benefits represented less than one-quarter of 1 percent and less than one-half of 1 percent of the total benefits provided through the DI and UI programs in fiscal year 2010, respectively.  One individual received over $62,000 in overlapping benefits in a year. The average weekly UI benefit was $299 in December 2010. The weekly maximum UI benefit in January 2011 for households without dependent benefits ranged from $133 (Puerto Rico) to $625 (Massachusetts).

Individuals may be eligible for concurrent cash benefit payments from both DI and UI due to differences in program eligibility requirements. Specifically, some individuals may have a disability under federal law but still be eligible for UI because they are able and available for work under state law. Further, the DI program allows disabled beneficiaries to work for up to 1 year while still receiving DI benefits in order to help them test their ability to return to the workforce. Work during this year can make the individual also eligible for UI benefits if they lose their job through no fault of their own. For DI beneficiaries receiving UI benefits, the federal government is replacing a portion of their lost earnings not once, but twice.

GAO reported in July 2012 that although DI and UI generally provide separate services to separate populations—and thus are not overlapping programs—the concurrent cash benefit payments for individuals eligible for both programs are an overlapping benefit, as both replace lost earnings.GAO recommended that SSA and DOL evaluate this overlap and request congressional authority to eliminate it as appropriate.  During the 113th Congress, several bills were introduced in both the U.S. House of Representatives and the Senate to eliminate concurrent DI and UI cash benefits; as of February 2014, none of these bills had passed.[1] The Congressional Budget Office estimated that such a provision would save $1.2 billion over 10 years from fiscal year 2014 through 2023.  In addition the President’s fiscal year 2015 budget identifies the concurrent receipt of DI and UI benefits as a loophole and includes a provision to close it.

[1]See H.R. 1502, 113th Cong. (2013); H.R. 3885, 113th Cong. (2014); S. 1099, 113th Cong. (2013); S.AMDT. 2631, 113th Cong. (2014); S. 1931, 113th Cong. (2014).

Actions Needed

Given that several bills have subsequently been introduced in Congress to address the identified issues, GAO suggests that Congress should consider:

  • passing legislation to require SSA to offset DI benefits for any UI benefits received in the same period.

CBO estimated that changing this law to prevent individuals from collecting full disability benefits and unemployment benefits that cover the same period of time will save $1.2 billion over 10 years.

How GAO Conducted Its Work

The information contained in this analysis is based on findings from the product listed in the related GAO products section. GAO matched the National Directory of New Hires (NDNH) unemployment files with extracts of SSA disability files of DI beneficiaries as of December 2010. To determine the subset of recipients who received DI and UI benefits at the same time during fiscal year 2010, GAO identified individuals who received DI benefits in all 3 months of the quarter for which they received UI benefits. For example, to be considered in receipt of overlapping DI and UI benefits under GAO’s criteria, an individual must have records in SSA disability files indicating the monthly receipt of DI benefits in January, February, and March of 2010, and must also have records in the NDNH indicating the quarterly receipt of UI benefits in the corresponding quarter of fiscal year 2010, which is the second quarter of fiscal year 2010. Using this methodology, GAO identified 117,000 individuals who received concurrent cash benefit payments from the DI and UI programs. Table 7 in appendix IV lists the programs GAO identified that might have similar or overlapping objectives, provide similar services, or be fragmented across government missions. Overlap and fragmentation might not necessarily lead to actual duplication, and some degree of overlap and duplication may be justified.

Agency Comments & GAO Contact

In commenting on the July 2012 report on which this analysis is based, DOL and SSA agreed with GAO’s recommendation that DOL work with SSA to evaluate overlapping DI and UI benefits, take appropriate action for any payments determined to be improper, and assess whether cost savings or other benefits might be achieved by reducing or eliminating overlapping DI and UI cash benefit payments. DOL and SSA have been working together to determine what information is available to assist in this analysis. As of February 2014 they were finalizing a report addressing GAO’s recommendations.

GAO provided a draft of this report section to DOL and SSA. DOL did not provide comments on this issue.  SSA provided written comments.  In their comments SSA stated that under existing regulations, they do not have the authority to reduce or withhold DI benefits due to the receipt of UI benefits. SSA also stated that their fiscal year 2014 budget included a legislative proposal to reduce or eliminate an individual's DI benefit in any month in which he or she also receives a State or Federal unemployment benefit. Further, this proposal would eliminate dual benefit payments covering the same period a beneficiary is out of the workforce, while still providing a base level of income support.

For additional information about this area, contact Steve Lord at (202) 512-6722 or

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