Workers’ Compensation vs. Unemployment: Which Benefits Are For Me?
We live in a money-driven society. If you’re out of work and aren’t bringing home a salary, it can be hard to make ends meet. In order to help you get by while you’re out of work, there are several programs in place. Two such programs are workers’ compensation and unemployment.
What is workers’ compensation?Workers’ compensation is a way for injured workers to pay for their medical bills and receive some of their normal salaries while they are recovering from being injured or ill while on the job. In Arizona, it’s even possible to receive workers’ comp if you shoulder some (or all) of the responsibility for how you were injured at work—unless you were under the influence of drugs or alcohol at the time of the accident.
Additionally, if your accident results in a permanent disability, there will not be any limit to how long you’re able to collect your workers’ compensation benefits. The lifetime of the benefits typically lasts from 3 to 7 years. Your doctor will make recommendations and your insurance company will decide on the amount of benefits you’ll receive. The amount is usually equal to two-thirds of your usual salary.
Workers’ compensation benefits are paid for by your employer’s workers’ compensation insurance provider.
What is unemployment?By comparison, unemployment benefits exist to provide you a portion of your income if you’re out of a job by no fault of your own. For example, you could become unemployed because of a plant closure or your company going out of business. Unlike workers’ compensation, the amount of unemployment you’ll receive is based on state regulations and the amount of benefits you’ll receive depends on where you live.
Employees who have their position terminated due to fault are not eligible for unemployment. Likewise, unemployment benefits are only available for workers who have the capacity to perform a job and are unable to find a job.
Can I receive both workers’ compensation AND unemployment benefits?Workers’ compensation claims can be quite complex. There are often times when claimants will be denied benefits and require the assistance of an attorney and the court system in order to receive their benefits. Being injured and without the means to take care of your financial needs is bad enough, but being denied your benefits makes things that much worse.
In the event that the workers’ compensation insurance company initially denies your claim, unemployment could be a way to receive income while you’re waiting on litigation. Depending on the judge handling your case, it isn’t beyond the realm of possibility for workers’ compensation litigation to take upward of 8 months to a year (or longer) to complete.
Obtaining unemployment benefits does come with some catches. Injured workers who have been fully disabled by their injury will not be eligible to receive unemployment benefits. However, those who are only partially disabled (i.e. those who can work light or sedentary duty work) would be able to draw unemployment benefits while waiting on their workers’ comp litigation. Nevertheless, a partially injured worker wouldn’t receive these benefits automatically. Your employer could still contest you receiving unemployment benefits.
An injured worker who is drawing unemployment benefits must also comply with all requirements that the unemployment administration has for those receiving benefits. This includes periodically reapplying for benefits (for the duration you’ll need them) as well as proving that you’re looking for employment.
Remember to either check your state’s laws carefully or hire an attorney who has experience with both unemployment and workers’ compensation laws. Some states have provisions that prohibit workers from collecting both types of benefits—known as “double-dipping.” In some states, the only way to collect both types of benefits is by receiving a catastrophic injury, such as an amputation.
If you receive unemployment benefits after your employer’s workers’ compensation insurance company denies your claim and you’re able to get the ruling overturned, the unemployment benefits you received will likely be deducted from your workers’ comp reward amount.
Temporarily receiving unemployment benefits can be a good way for injured workers waiting to receive their workers’ compensation benefits to have financial security. However, it’s important to remember that unemployment is taxable and will not last forever. Injured workers who are able to win their workers’ comp benefits are typically advised to allow their unemployment benefits to lapse as soon as they obtain their workers’ comp.