Wisconsin Law Prohibiting Simultaneous Collection of SSDI and UI Benefits Targeted in New Federal Lawsuit

A class-action lawsuit filed Tuesday alleges that Wisconsin’s unemployment system discriminates against people with disabilities. Currently, Wisconsin automatically rejects unemployment claims from people who received Social Security Disability Insurance (SSDI) in that month.

SSDI is a federal program that employees and employers pay into through taxes. If a disability prevents someone from holding “substantial gainful” employment, they can apply to receive SSDI payments. The program encourages people to work as much as they are able. The standard for “substantial gainful” employment varies from year to year. In 2020, non-blind people with disabilities were eligible for SSDI if they made less than $1,260 per month.

In 2013, Wisconsin passed a law saying people receiving Social Security disability cannot simultaneously receive state unemployment benefits. Lawmakers said at the time the goal was to prevent fraud and “double dippers.”

The class-action lawsuit asks for a permanent halt to Wisconsin’s SSDI unemployment benefits ban; it also asks for an injunction to temporarily stop the ban while the issue works its way through the courts, an allowance for SSDI recipients to go back and file unemployment claims from the last six years, and a repayment of unemployment benefits to SSDI recipients who initially received unemployment but were forced to pay it back because of their disability payments.