An injury at work can turn your life upside down. Suddenly, you may face medical bills, missed paychecks, and uncertainty about when or if you can return to work. On top of the physical and financial strain, many workers also wonder about benefits. If you are already receiving workers’ compensation, you might ask: Does workers’ comp count as income for unemployment, and can I collect both simultaneously?
It’s a fair question. Navigating the overlap between workers’ comp and unemployment is confusing, and the rules vary depending on your situation. Marker Law, LLC, a Naperville-based personal injury and workers’ compensation law firm with over 25 years of experience, helps injured workers understand their rights and pursue the necessary benefits.
This article explains how workers’ comp affects the weekly unemployment amount, when you might qualify for the dual benefits of workers’ comp and unemployment, and what Illinois law says about workers’ comp and income eligibility.
Contact us today at 331-295-8005 to discuss your case and learn how we can help you.
Does Workers’ Comp Count as Income for Unemployment?
Workers’ compensation is not treated as “income” in the traditional sense regarding unemployment. Instead, the issue is whether you meet the eligibility requirements for each program. Put simply:
- Workers’ compensation provides benefits if you cannot work because of a job-related injury or illness, and
- Unemployment benefits are for those who are able and available to work but currently do not have a job.
At first glance, these two programs seem to contradict each other. If you are too injured to work and receive workers’ comp, you likely will not qualify for unemployment. But in some cases, the two can overlap.
The key is that workers’ comp is not income for unemployment purposes. Instead, it affects whether you meet the legal standard of being “able and available” to work under Illinois unemployment law.
Workers’ Comp and Income Eligibility for Unemployment
Your eligibility for unemployment benefits is determined by the wages you earned before your injury. Workers’ comp payments do not count as wages in this calculation.
However, workers’ comp can indirectly affect eligibility. If your injury leaves you completely unable to work, you will not meet unemployment’s requirement that you be ready and able to accept a job. But if you are partially able to work and your employer has no work to offer, you may still qualify.
How Does Workers’ Comp Affect My Weekly Unemployment Amount?
If you qualify for unemployment while on workers’ comp, the amount you receive may be reduced. Illinois law prevents “double recovery,” meaning you cannot be fully compensated by both programs simultaneously.
If your weekly workers’ comp benefits cover part of your lost wages, your unemployment check may be adjusted downward to account for that amount. The goal is for benefits to replace income fairly without providing more than what you earned before the injury.
For example, suppose a warehouse worker injures their back on the job. Their doctor clears them for light-duty work, but the employer has no light-duty positions available. In this situation, workers may still qualify for unemployment because they are medically able and available to work, just not in their former role. At the same time, they may continue receiving partial workers’ compensation benefits to cover the wages lost due to their injury restrictions.
FAQs
Here is more information regarding the overlap between workers’ compensation and unemployment income.
What Disqualifies You for Unemployment in Illinois?
You can be disqualified from unemployment benefits in Illinois for several reasons, including:
- Being unable to work because of a medical condition,
- Quitting without a work-related good cause,
- Being fired for misconduct, or
- Refusing suitable work when offered.
In short, unemployment is only available to workers who are both willing and able to work.
What Counts as Unemployment Income?
Unemployment income refers to the weekly benefits you receive through the Illinois Department of Employment Security (IDES) if you lose your job through no fault of your own and have earned money in the last 18 months. These payments are meant to replace your wages while you search for new work.
For tax purposes, unemployment benefits are considered taxable income at both the federal and state levels. That means you must report them on your federal tax return and your Illinois state return.
Unemployment income can include regular weekly benefits and any extensions or supplemental benefits provided under state or federal programs.
Is Workers’ Comp Considered Disability Income?
Workers’ comp is different from disability income. Disability benefits, such as Social Security Disability, provide income when you cannot work due to a disability, regardless of how it happened. On the other hand, workers’ comp covers job-related injuries or illnesses. For tax purposes, workers’ comp is generally not treated as disability income.
Understand the Dual Benefits of Workers’ Comp and Unemployment Income
So, does workers’ comp count as income for unemployment? It depends. The system can feel complicated when you are hurt, out of work, and worried about supporting your family. While workers’ comp is not considered unemployment income, it can affect your eligibility and reduce your unemployment benefits if you qualify for both.
Marker Law, LLC knows how stressful it is to juggle medical treatment, bills, and confusing benefit programs after a workplace injury. Our firm combines deep legal knowledge with a compassionate, client-first approach. Our seasoned legal team works hard to help injured workers understand their options and have the best opportunity to pursue every benefit available to them.
If you are unsure whether you can collect unemployment while receiving workers’ comp, or if your benefits have been denied or reduced, contact Marker Law, LLC today for a free consultation.