Am I Eligible for Disability Benefits If My Employer Goes Bankrupt?

 Posted on February 16, 2016 in Need to Apply for Social Security Disability

About six percent of Illinois workers are unemployed, according to the most recent statistics from the Illinois Department of Employment Security. If you lose your job because your employer goes out of business, does this mean you are no longer eligible for Social Security Disability Insurance benefits? Not at all. Disability benefits are based on an employee's “last date insured.” For most workers, this means you must have been employed within the last five years. So if you last worked in 2012, you remain eligible for disability benefits until 2017 regardless of whether your former employer is still in business.

Judge Says Social Security “Patently Wrong” About Truck Driver's Medical History

Unfortunately, some Social Security officials may improperly try to use the closing of an employee's former company as an excuse to deny benefits. Here is a recent Illinois case that illustrates this problem. The applicant was a truck driver who last worked in 2010, when his employer filed for bankruptcy and went out of business.

For several years prior to his employer's closing, the applicant experienced progressively worsening back pain. The applicant's first diagnosis regarding back pain came in 2004. In 2005, a physician imposed several work restrictions on the applicant. In 2007, the applicant was in a car accident, which caused additional neck and back pain. The plaintiff's complaints of pain and medical treatment continued after he lost his job in 2010.

Despite an extensive history of debilitating back pain, a Social Security administrative law judge (ALJ) determined the applicant was not disabled. The ALJ determined the applicant's testimony regarding his disability was not credible because, in her words, his “medical records demonstrate few reports of back pain and little treatment since the alleged onset date.”

On appeal, a federal magistrate said the ALJ's findings were “patently wrong” and ordered Social Security to reconsider the applicant's case. The magistrate said the ALJ ignored “salient facts,” including the applicant's “steady complaints of back pain to his treating physicians” and the fact that his doctors repeatedly prescribed him pain medication.

The magistrate also said the ALJ improperly cited the bankruptcy of the applicant's former employer as a factor in declaring his testimony lacked credibility. The magistrate said the ALJ jumped to conclusions without citing appropriate evidence. “In essence,” the magistrate wrote, “the ALJ does not explain how [the applicant's] termination somehow shows that his alleged symptoms are overstated or contradict his alleged pain.”

Get Help from a Chicago Disability Attorney

There are many valid reasons for Social Security to deny a disability claim. The fact a person's former employer went out of business is not one of them. Nevertheless, some Social Security officials may go looking for any excuse to deny your disability claim. That is why you need to work with an experienced Chicago Social Security Disability attorney. If you need to speak with an attorney about your current or potential Social Security case, contact Pearson Disability Law, LLC, right away.

Sources:

http://www.ides.illinois.gov/SitePages/NewsArticleDisplay.aspx?NewsID=300

https://scholar.google.com/scholar_case?case=4430639851782833137