Q Can employees collect workers’ compensation at the same time as unemployment or state disability insurance payments?
The short answer is no.
In Wisconsin, workers’ compensation, unemployment benefits, and disability insurance are distinct forms of support, each designed to address specific situations. Workers’ comp provides financial and medical benefits to employees who suffer work-related injuries or illnesses. The benefits may include coverage for medical expenses, wage loss, and rehabilitation services. Workers’ comp is typically designed to replace a portion of lost wages while the employee is unable to work because of an injury.
“Unemployment” in Wisconsin refers to unemployment insurance benefits, a state-run program administered by the Department of Workforce Development (DWD) designed to provide temporary financial assistance to eligible workers who have lost their jobs through no fault of their own. These payments aim to help individuals cover basic living expenses while they search for new employment.
Unlike some states, Wisconsin doesn’t offer a state disability insurance program. Although Wisconsin doesn’t have state disability insurance, many people look to federally funded Social Security Disability Insurance (SSDI). Notably in most states, workers’ comp benefits reduce SSDI benefits. In Wisconsin, the reverse is true: SSDI benefits reduce workers’ comp benefits.
As seen with the relationship between SSDI and workers’ comp, we generally expect these three types of benefits to create offsets. Thus, in Wisconsin, you generally cannot collect both workers’ comp and unemployment benefits at the same time. This is because each type of assistance is for a distinct purpose. Unemployment benefits are for individuals who are willing and able to work but are unable to get a job. Workers’ comp, generally known as “time loss,” is for people who are unable to work because of work injuries or occupational diseases. Thus, these benefits usually offset dollar-for-dollar. The offset occurs because both payments are seen as sources of lost wages.
For example, when a person’s workers’ comp claim is conceded and they are awarded weekly benefits, the benefits are treated as wages by the DWD and usually fully offset any potential unemployment benefits. Most often, the awarded workers’ comp weekly amount (two-thirds of regular income) is greater than the unemployment benefit amount (capped at $370/week).
A direct example of this offset taking place could be seen when a person’s workers’ comp claim is initially denied, and they appeal their claim. Often, the resulting settlement takes into account the workers’ comp benefit that would have been paid if the claim had not originally been denied. In these circumstances, if the DWD discovers the existence of a workers’ comp settlement amount for a period of time during which the person was also receiving unemployment benefits, the DWD may pursue repayment of the unemployment benefits paid prior to the workers’ comp settlement.
Connor Mooney is an attorney with Axley Brynelson, LLP, in Madison, Wisconsin. He can be reached at 608-283-6728 or cmooney@axley.com.