The offices of the Wisconsin Department of Workforce Development, in Madison. The department administers the state unemployment insurance program. (Wisconsin Examiner photo)
A change to unemployment compensation that would penalize people who receive federal disability payments has made it into a draft bill to revise Wisconsin’s unemployment insurance law — despite vocal opposition from Democrats in the state Legislature.
For people who receive Social Security Disability Insurance (SSDI) income, the change would sharply reduce their jobless pay if they lose work. For many, it could wipe out their unemployment compensation entirely, according to Victor Forberger, a veteran unemployment insurance lawyer.
The SSDI provision is part of the agreed-upon draft legislation that was approved Wednesday by the Unemployment Insurance Advisory Council.
The council includes an equal number of management and labor representatives and was established in 1932 to give labor and management an equal voice in shaping the state’s unemployment insurance (UI) program. The council’s members negotiate and draft changes to the state’s UI laws every two years.
On Wednesday Forberger called the council’s 2025 draft bill “a terrible deal for workers.”
Less than a week ago, the Department of Workforce Development (DWD) walked back an earlier proposal to penalize SSDI recipients who apply for jobless pay. The return of a similar provision in the draft bill caught critics by surprise.
“I was pretty shocked when I heard about it this morning,” said state Rep. Christine Sinicki (D-Milwaukee), a vocal critic of the earlier proposal. “I thought it was put to rest.”
The SSDI unemployment pay ban
Since 2013, under a law enacted in then-Gov. Scott Walker’s first term, people who receive SSDI income are automatically disqualified from collecting unemployment insurance — despite the fact that many SSDI recipients hold part-time jobs and would otherwise qualify for jobless pay if they get laid off.
In July 2024 a federal judge ruled that 2013 law violated two federal laws: the Americans with Disabilities Act and the Rehabilitation Act. The ruling came in a lawsuit that a team of lawyers including Forberger filed on behalf of SSDI recipients who were denied unemployment compensation when they were thrown out of work.
This summer, the judge, William Conley, ordered DWD to stop disqualifying unemployment compensation applications simply because an applicant also receives SSDI.
In August, Conley ordered the department to reconsider the applications of people denied UI because of the ban since 2015 and to award them the jobless pay they would have qualified for without the ban. Conley also ordered DWD to repay applicants who had originally received jobless pay, then had it clawed back after the department belatedly found that they were also SSDI recipients.
Also in August, the joint labor-management advisory committee reviewed a dozen proposed changes in state unemployment insurance law requested by DWD.
One of those proposals was to repeal the 2013 state ban on unemployment pay for people on SSDI. The memo noted the court’s ruling invalidating the ban.
But that proposal also called for offsetting an SSDI recipient’s weekly unemployment pay by the weekly value of the SSDI income. The memo acknowledged that the proposal would probably eliminate unemployment compensation for most SSDI recipients who applied.
“In 2024, the average SSDI payment in Wisconsin was $1,500 per month,” the DWD proposal memo stated. “The average weekly SSDI payment for UI purposes is calculated at $346.20 per week. This weekly amount will in many cases fully reduce the UI benefit a SSDI recipient can receive.”
The memo concluded, “In summary, most SSDI claimants will not be able to receive UI benefits. While some may be able to receive UI benefits, it is expected that the weekly UI payment would be small.”
Offset proposal walked back — then returns
The proposal sparked backlash from Forberger and Democratic lawmakers. On Sept. 18, DWD submitted an amended version of the proposal to the advisory council.
The revision removed the offset provision entirely and called for simply repealing the ban on jobless pay for SSDI recipients.
The department noted in its amendment memo that the process of paying past unemployment insurance applicants under the court order had begun, and that those payments were being made without a deduction for SSDI income.
“The Department is amending its proposal to repeal the SSDI disqualification provision and remove the offset provision,” the Sept. 18 memo stated. “This 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.”
At the Unemployment Insurance Advisory Council’s meeting on Wednesday morning, the body approved a draft bill for updates to Wisconsin’s UI law on a unanimous vote.
The draft includes a repeal of the SSDI unemployment compensation ban. Despite DWD’s Sept. 18 memo, however, the draft includes language that claws back some of an SSDI recipient’s jobless pay.
“If a monthly social security disability insurance payment is issued to a claimant, the department shall reduce benefits otherwise payable to the claimant for a given week by one-half of the amount [of a] security disability insurance payment that is allocated for that week,” the draft bill states.
While the offset in the draft bill is half what the original DWD proposal called for, Forberger said Wednesday that even the 50% offset would likely mean no unemployment pay for many SSDI recipients.
Sinicki and state Sen. Kristin Dassler-Alfheim (D-Appleton) introduced a bill of their own earlier this month to repeal the ban.
“Receiving SSDI should not prevent working Wisconsinites from receiving unemployment insurance if they’re laid off,” Dassler-Alfheim told the Wisconsin Examiner on Wednesday. “That’s why Rep. Sinicki and I have proposed legislation to remove that ban from state statute, and I’m really hoping that we can see it across the finish line and put this problem to rest once and for all.”
The draft bill is the product of provisions worked out by each caucus — management and labor — in separate closed sessions. The Wisconsin Examiner contacted two senior representatives in the labor caucus of the council for comment Wednesday on the process, but received no response.
“I’m looking forward to finding out how this language got in there,” Sinicki told the Wisconsin Examiner Wednesday afternoon.
“If that language is in there, it is in violation of the Americans with Disabilities Act and you know the courts have already said that. I’ve already said that,” Sinicki said. “And now they’re just going to end up right back in court with this. It makes no sense to me.”
Sinicki has long championed the advisory councils for unemployment insurance as well as for workers comp for negotiating legislation that represents the interests of both labor and management. She’s often chided Republican lawmakers who have authored and passed bills affecting either of those systems without going through the councils.
This time, “I’m struggling with it — I’ll be honest — because it is the agreed-upon bill,” Sinicki said of the unemployment insurance draft. “But first of all, as a Democrat and as somebody who prides herself in the fact that we take care of our most needy, I can’t vote for this.”
Sinicki said the legislation after it’s introduced is subject to being amended like any other bill, and that she would expect an amendment removing the offset proposal.
By tradition, the bill that comes from the advisory council is introduced under the names of the committee chair and the minority party ranking member on the Assembly’s labor committee — which is Sinicki.
Unless the draft is changed, however, “I will not be putting my name on this bill,” she said.
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