DWD Kills Proposal to Subtract Disability Payments From Unemployment Compensation
“This is wonderful news for everyone involved and for the state of Wisconsin in general, disabled or non-disabled," says attorney.
Bytemarks (CC-BY)
The state labor department has backed away from its controversial proposal to change state unemployment insurance law that critics say would have perpetuated discrimination against people with disabilities.
A newly amended proposal from the state Department of Workforce Development (DWD) calls for repealing Wisconsin’s ban on jobless pay for people who receive Social Security Disability Insurance (SSDI) income.
The proposal follows a federal court ruling that found the ban violates two federal laws protecting people with disabilities.
Until this week, however, DWD’s proposal to repeal the ban included an additional provision: While a person receiving SSDI payments would be eligible for unemployment insurance after losing a job, disability income would “offset” — cancel out — some or all of the individual’s unemployment compensation.
The SSDI proposal was one of a dozen changes to the state’s unemployment insurance law that DWD submitted to the joint labor-management Unemployment Insurance Advisory Council earlier this year. The council, a long-standing body with equal representation from business and labor, negotiates changes to the state’s unemployment insurance laws every two years.
On Thursday, DWD submitted an amended version of its SSDI proposal. The new version repeals the ban on jobless pay for SSDI recipients and omits the offset provision.
“This is wonderful news for everyone involved and for the state of Wisconsin in general, disabled or non-disabled,” said lawyer Victor Forberger.
Forberger has specialized in representing people whose unemployment insurance claims have been rejected. He was one of the lawyers who sued DWD in federal court in 2021 to overturn the state law banning jobless pay for SSDI recipients.
Jobless pay ban violates federal law
U.S. District Judge William Conley ruled in July 2024 that the jobless pay ban violated the Americans with Disabilities Act and the Rehabilitation Act.
Even after that ruling, DWD continued to deny unemployment claims made by people on SSDI. This July 14, Conley ordered DWD to stop disqualifying SSDI recipients from unemployment compensation.
In August, the judge ordered DWD to pay jobless benefits to eligible applicants who were denied because they received SSDI payments between Sept. 7, 2015 — when the SSDI-unemployment ban law was last revised — and July 30, 2025. Conley also ordered DWD to pay back people who had collected jobless pay but then ordered to pay back the money because they were on SSDI.
The federal Social Security Administration program allows and encourages disability insurance recipients to work part-time if they are able to.
During the administration of Gov. Scott Walker, however, DWD asserted in a proposal that disability payment recipients who applied for unemployment insurance were probably “double-dipping” and committing “fraud.” The ban on unemployment pay for SSDI recipients was enacted in 2013, during Walker’s first term, and revised in 2015 during his second term.
DWD proposes unemployment insurance changes
Earlier this year DWD drafted 12 proposed revisions to Wisconsin’s unemployment insurance law for the joint labor-management Unemployment Insurance Advisory Council to consider.
The department’s SSDI proposal called for repealing the ban on jobless pay, but also called for offsetting an SSDI recipient’s unemployment compensation on the basis of the disability income.
When Forberger read the DWD proposal and saw the offset provision, he wrote about it on his blog about unemployment insurance policy and wrote to the labor caucus members of the advisory council urging them not to support it.
The offset provision was still part of DWD’s SSDI repeal recommendation when the department presented its proposals to the advisory council in August.
The offset provision surprised state Rep. Christine Sinicki (D-Milwaukee) when it came to her attention. Sinicki has often scolded lawmakers when they introduce bills to change the unemployment compensation system without sending them through the joint labor-management council.
“I’ve always been a stickler for, you vote yes on the agreed-upon bill [from the advisory council] because it was a compromise between both parties,” Sinicki told the Wisconsin Examiner on Thursday. But when she learned of the offset provision, “I made it very clear that I would not vote for any bill that had that in there.”
Sinicki along with Sen. Kristin Dassler-Alfheim (D-Appleton) have authored their own proposal to repeal the SSDI jobless pay ban after the court ordered DWD to stop enforcing it. Both said they opposed DWD’s offset proposal and that they were glad to see that the department scrapped it Thursday.
‘Discrimination. Full stop.’
“What’s happening right now is discrimination. Full stop,” Dassler-Alfheim said in a written statement to the Wisconsin Examiner. “That’s why the federal judge ruled against it, that’s why Representative Sinicki and I have proposed legislation to remove it from state statute, and I’m glad to see that DWD has put forth this amendment” removing the offset.
Three proposed budgets from Gov. Tony Evers included recommendations to end the SSDI jobless pay ban, but with an offset provision as well. Those largely went unnoticed at the time, and were removed along with hundreds of other Evers proposals by the Republican leaders of the Joint Finance Committee during budget deliberations.
It wasn’t clear Thursday what prompted DWD to remove the offset provision from its latest proposal. The department memo to the joint advisory council said that it was already complying with Conley’s order to process benefit claims for SSDI recipients and would do so for previously-denied claims without an offset.
Amending its proposed change in the law to remove the offset provision “will align with the effect of the court’s order that is now allowing claimants who receive SSDI to be eligible for the full amount of their weekly benefit without a reduction for any SSDI received,” the memo states.
Sinicki said that while she was outspoken about her opposition to the offset provision, she had not directly communicated that either to DWD or to members of the advisory council.
A spokesperson for Dassler-Alfheim said she also had not been in direct contact with DWD or the Evers administration about her opposition to the offset.
DWD kills proposal to subtract disability payments from unemployment compensation was originally published by Wisconsin Examiner
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