Can I collect workers compensation benefits and other benefits, such as unemployment benefits, at the same time?
By Daniel E. McCabe
Wolf, Baldwin, and Associates, P.C.
As workers’ compensation lawyers we are often asked whether it is possible to receive workers’ compensation benefits in addition to unemployment and/or Social Security benefits. Further, we are often asked whether there would be any advantage to collecting multiple benefits at the same time. The simple answer to all these questions is “yes.” However, the interplay between these three types of benefits can be quite complicated. First, we will address why you would ever want or need to collect more than one type of these benefits at one time.
As attorneys, when people come to us looking to get help obtaining workers’ compensation benefits, it often means that their claim has been denied. This means that they were injured at work, and for whatever reason the insurance carrier is refusing to pay a wage loss benefit. If the claim has been denied for both medical and wage loss, the injured worker will be without both medical benefits for the injury, and without wage loss benefits, unless the benefits can be “turned on” either through court proceedings or an agreement of the parties. If the injury is very severe, this may mean that they would be without income for as long as takes to litigate a claim for workers’ compensation benefits; to litigate a claim petition for workers’ compensation benefits from start to finish, depending on the judge, could very well take anywhere from eight months to a year, or even longer. So, how will these injured workers get by in the meantime?
One of the possible sources of income for a person in this predicament would be unemployment benefits. However, there are a few catches if this person expects to be able to get such benefits. First, if the injured worker has been fully disabled from working by her doctor, she will not be able to receive unemployment benefits. In other words, unemployment benefits are only available to someone who is able to work in some capacity and is unable to find any type of job. So what this means in practical purposes, is if the injured employee applies for unemployment but is unable to perform any type of work whatsoever due to the injury, unemployment is not available. However, if the injured employee is only disabled from her original job, and is available for light or sedentary duty work, and her employer has offered no such work, unemployment benefits may very well be available, but they are not automatic. The employer is not precluded from challenging the award of unemployment benefits. If the employer challenges the unemployment, the injured worker may very well need to hire counsel to pursue those benefits.
However, let us assume that the injured worker receives unemployment benefits during the litigation of the workers’ comp claim petition. First, he must comply with the requirements of the unemployment administration, including reapplying for benefits periodically while showing job seeking efforts with alternative employers. This may seem strange, especially since the injured worker often has plans to return to the pre-injury job as soon as he is able.
If the petition for workers’ compensation benefits is successful, in Pennsylvania the employer and its workers’ compensation insurance carrier will be entitled to a credit for the net unemployment benefits received by the injured worker. For example, if the injured worker is injured on January 1, 2013, and the claim is originally denied but litigated for a year, if the claim is successful, workers’ compensation benefits would be payable retroactively for the entire year that the claim is litigated. If the injured worker received unemployment benefits for any or all of that time, the back owed workers’ comp benefits would be offset by the net amount of unemployment benefits received. Thus, if the amount of weekly workers compensation benefits received are nearly identical to the amount received under unemployment, there may be little or no benefits owed to the injured worker for the previous year, although there would possibly be benefits going into the future, and further unemployment claims would not be necessary. Unlike workers’ compensation benefits, unemployment benefits are taxable and are not indefinite. Thus, we typically advise clients that once the workers’ compensation benefits begin, the client should allow the unemployment award to lapse.
Similarly, we are often questioned by clients wondering whether to apply for Social Security Disability benefits while receiving or attempting to obtain workers’ compensation benefits. It is legal in Pennsylvania to receive both types of benefits at one time. However, Social Security Disability benefits will usually be offset by the amount of workers’ compensation benefits received the injured worker. This calculation is complicated and is specific to each individual’s case, but the concept is that Social Security limits the amount you can receive in Social Security Disability plus workers’ compensation combined, and will reduce the Social Security award to cap the total received by the injured worker.
At first glance it may appear that would not make sense for someone receiving workers’ compensation benefits to apply for Social Security Disability. However, even if Social Security benefits are reduced by an offset, a few dollars more per month can be very beneficial to struggling families in these tough economic times. Additionally, a big advantage to the Social Security Disability award is the ability of the injured worker to obtain Medicare benefits to cover non-work related medical issues. This would become increasingly important during the litigation of a claim if the employer refuses to continue to pay for the injured worker’s health benefits. In general, a Pennsylvania employer is not required to continue to pay for the health benefits of an injured worker while that person is not able to work due to a work injury, so having an additional avenue to obtain coverage is important.
Keep in mind, however, that the receipt of Social Security Disability benefits will have a significant impact on a workers’ compensation claim, especially when it comes to settlement negotiations. These issues are beyond the scope of this article, however, if you are receiving workers’ compensation benefits and have any thoughts of applying for Social Security Disability benefits, consultation with an attorney would highly advisable.
This article is meant to be an overview of the interplay between these benefits. No article can substitute for the expert opinion of a workers’ compensation lawyer. Any person receiving or seeking workers’ compensation benefits should meet with an attorney who focuses on workers’ compensation to discuss applying for unemployment or Social Security Disability and their effects on his or her claim.
Daniel E. McCabe, Esq., is an associate in the law firm of Wolf, Baldwin & Associates, P.C.. His practice, located in the firm’s West Chester office, concentrates on the representation of injured workers and medical providers. He can be reached by phone at 610-436-8300, or by e-mail.