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Introduction: Can I Collect Unemployment if Terminated While on Disability?

If you’ve been terminated while on disability leave, you may be wondering: Can I collect unemployment if terminated while on disability? This is a common concern for employees in Texas, and especially for individuals navigating medical leave or recovering from a serious health condition. For residents of Sugar Land and throughout Texas, The Lange Firm—led by Evan Lange—offers legal services that guide individuals through the often complex legal landscape that arises after termination or while receiving disability benefits.

Whether you’re temporarily out of work due to a disability or permanently terminated, understanding how Texas handles unemployment and disability benefits is crucial. And just as important: understanding whether you can collect unemployment and disability at the same time. In this blog, we’ll explore these questions in detail to help you make informed decisions about your future.

Can I Collect Unemployment if Terminated While on Disability in Texas?

What Texas Law Says About Termination During Disability

In Texas, employers have significant discretion regarding employment decisions. Employees who are on disability leave can still be legally terminated, particularly if they are unable to return to work within a reasonable period. But what happens next in terms of unemployment eligibility?

To qualify for unemployment benefits in Texas, you must meet several key criteria:

• You must be physically able to work.
• You must be actively seeking new employment.
• Your termination must have occurred through no fault of your own.

This creates a potential conflict if you’re still disabled at the time of applying for unemployment benefits. That brings us back to the question: Can I collect unemployment if terminated while on disability? The answer is not always straightforward, and it depends heavily on the severity of your condition and your ability to work.

Can You Collect Unemployment and Disability at the Same Time in Texas?

Understanding How Unemployment and Disability Benefits Interact

This is a related but distinct question: Can you collect unemployment and disability at the same time? In general, Texas does not allow individuals to “double-dip” by receiving both unemployment benefits and state disability benefits at the same time. The reasoning is simple: Unemployment benefits require you to be capable of working, while disability benefits typically require you to be unable to work.

How Federal Programs Affect This Process

Social Security Disability and Unemployment Eligibility

For those receiving Social Security Disability Insurance (SSDI), things get a bit more nuanced. SSDI recipients may, in some cases, qualify for unemployment benefits if they can demonstrate that they are capable of working (albeit perhaps in a limited capacity). However, this is rare and difficult to prove. In contrast, individuals receiving Supplemental Security Income (SSI) are typically disqualified from unemployment because SSI eligibility hinges on being unable to work.

Can I Collect Unemployment if Terminated While on Disability and Seeking Modified Work?

Exploring Work-Ability vs. Work-Availability

If your disability allows you to work, but only in a reduced capacity, you might still be eligible for unemployment if you actively seek work that fits your limitations. The Texas Workforce Commission (TWC) will evaluate whether you are genuinely available for “suitable work,” considering your physical restrictions.

This is where documentation becomes crucial. Medical records, employer communication, and evidence of your job search can all help you make a stronger case when applying for unemployment benefits after a disability-related termination.

Can You Collect Unemployment and Disability at the Same Time if Benefits are Private?

Short-Term and Long-Term Disability Insurance Plans

If you are receiving benefits from a private short-term or long-term disability (STD/LTD) insurance plan through your employer, this can complicate things further. Texas does not have its own state disability insurance, so these private policies operate under contractual terms. Some policies allow you to receive partial disability payments while working part-time, potentially opening the door to collecting both unemployment and disability under limited circumstances.

Can I Collect Unemployment if Terminated While on Disability Due to COVID-19?

Pandemic-Related Considerations

During the height of the COVID-19 pandemic, rules surrounding unemployment and disability changed dramatically. Individuals who were unable to work due to COVID-related health issues or caregiving responsibilities were sometimes eligible for special unemployment programs.

While these pandemic-era programs have largely ended, the experience highlighted how fluid the interaction between unemployment and disability can be when public policy shifts.

Can You Collect Unemployment and Disability at the Same Time If You Recover Mid-Process?

Transitioning from Disability to Job Search

If you recover from your disability and are ready to return to work—but find yourself terminated—you could then become eligible for unemployment benefits. In this case, your timeline becomes critical:

• You were disabled and unable to work (disqualifying for unemployment).
• You recovered and became capable of work (qualifying for unemployment).
• Your termination occurred after you were medically cleared.

This timeline can help protect your eligibility for unemployment benefits in Texas.

Can I Collect Unemployment if Terminated While on Disability and Facing Retaliation?

Wrongful Termination Concerns

While this blog does not offer legal advice, it is worth noting that some disability-related terminations may involve unlawful discrimination or retaliation. If you believe your termination violated state or federal law, consulting with an attorney like Evan Lange at The Lange Firm in Sugar Land can help you explore your legal options.

Can You Collect Unemployment and Disability at the Same Time When Disability is Partial?

Partial Disability and Part-Time Work

Partial disability benefits—offered through some private policies—are designed for individuals who can work reduced hours. If you qualify for these, you might be able to receive both a reduced disability benefit and partial unemployment, depending on how the income from each source is calculated and reported.

Can I Collect Unemployment if Terminated While on Disability and Receiving Workers’ Compensation?

Workers’ Comp vs. Unemployment

If your disability is work-related and you are receiving workers’ compensation, you may find that you are ineligible for unemployment benefits. This is because workers’ compensation replaces lost wages, while unemployment is meant for individuals actively seeking work.

Can You Collect Unemployment and Disability at the Same Time After a Medical Review?

Medical Documentation and Reviews

No matter which benefits you pursue, comprehensive and consistent medical documentation is essential. This is especially true if your condition changes over time and you transition from disability benefits to unemployment.

Conclusion

For individuals in Sugar Land and across Texas, questions like Can I collect unemployment if terminated while on disability? and Can you collect unemployment and disability at the same time? can be confusing and stressful. While each case is unique, understanding how Texas law views work ability, medical documentation, and the interplay between different benefits can help you plan your next steps.

If you need personalized legal guidance, The Lange Firm, led by Evan Lange, is here to assist. They can help you understand your rights and explore your options after termination or while receiving disability benefits. Although this blog does not constitute legal advice, it can serve as a helpful starting point in your research.