Rabbi Daniel Dombroff
Answer: The relevant halachic issue here is one of deceiving non-Jews (in this case the government) by giving false information in order to receive funds. However, this particular case is likely permitted.
Although one may not engage in normal prohibited melacha (labor) on Shabbos or Yom Tov, he can technically do another job that is permitted (as in any case he is unemployed), such as tutoring students in Torah subjects. Despite the prohibition of receiving payment for such a job performed on Shabbos (sechar Shabbos), there are ways to allow this, such as havla'ah — working (in this case tutoring) during the week as well and charging one price for the overall service.
The same would be true for other permitted work on Shabbos, such as giving a shiur, which the individual in question was certainly capable of doing and willing to do. Although doing such work was not practical in this case, since in theory he could have done this type of work, that capability is sufficient for the purposes of the unemployment requirement.
This raises a different question though of whether it is permitted to receive unemployment funds at all due to the issue of sechar Shabbos. Tosafos in Kesubos states that one who does not give his wife enough money for food receives a kenas (fine) where we add on additional money to her Kesubah for each delinquent day. However, Tosafos explains that we deduct the amount of money for Shabbos from the sum since that would appear to be a form of sechar Shabbos. Based on this Tosafos, one might conclude that there is a problem of sechar Shabbos as well with regard to receiving unemployment funds, some of which would cover Shabbos. (In truth, unemployment is a weekly benefit which would be Halvaah, however this discussion may be relevant for disability).
But according to Rav Moshe Feinstein, this may not be a problem either. Rav Moshe discusses a nursing home that received government funds to operate and rules that sechar Shabbos is not an issue. He explains that since the government would never give money for one day alone, but only for a longer period, any money received for Shabbos is treated as havla'ah as well, despite the fact that the amount of the payment is divided into individual days.
The same applies to receiving unemployment, even if the sum is divided up by individual days, it would never be given for one day of unemployment alone. Therefore, Rav Moshe's allowance in the case of the nursing home would be relevant here as well. In addition, another factor for leniency may be that the system itself might be structured as havla'ah, but that is beyond the purview of this discussion.
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