Unemployment vs. Workers’ Compensation: What You Need to Know
If a work injury is keeping you from earning a paycheck, one of your first priorities is likely finding a sense of stability. You may be confused about whether you should file for unemployment or workers’ compensation. You may also wonder, “Can I collect both at once?”
Navigating these programs can feel complex, but understanding how they work together will help ease your journey to recovery. In Iowa, you generally can’t receive both unemployment and weekly workers’ comp benefits at the same time. That’s because they serve two different purposes. However, you may be eligible for each of them at a different point in your recovery journey.
Getting the timing right is also important. If you wait too long to take action, or if you quit your job in hopes of qualifying for certain benefits, you could hurt your claim.
Our Iowa workers’ compensation attorneys have represented injured Iowa workers for decades. We do not practice unemployment law, but we can answer general questions about how your unemployment benefits may interact with your workers’ compensation benefits. Here’s a quick guide to the differences between these two types of benefits, and when you could be eligible for each during your work injury case.
Workers’ Comp vs. Unemployment Benefits: Key Differences
Unemployment and workers’ compensation both provide income to Iowans who are out of work. However, the scenarios they cover are different.
- Workers’ compensation covers Iowans who are unable to work (or have reduced work) due to a workplace injury.
- Unemployment covers Iowans who are “able and available” to work but who do not have a job.
There are other differences, too. Here’s a closer look at workers’ compensation vs. unemployment in Iowa.
| Workers’ Compensation | Unemployment | |
| Who Can Get It | Workers who have been injured on the job and, as a result, cannot work or have work limitations | Iowans who are ready and able to work but who do not have a job |
| Who Pays the Benefits | Employer’s insurance carrier | The state of Iowa |
| Duration | Varies based on the severity of injury. Some severe injuries could pay benefits for the rest of a worker’s life. | Generally, up to 16 weeks |
| Benefit Amount | Medical bills, plus up to 80% of your spendable wages | Partial wage replacement |
| Is It Taxable? | No | Yes |
Can Iowans Get Workers’ Comp & Unemployment Benefits at the Same Time?
In Iowa, you cannot receive Temporary Total Disability (TTD) workers’ comp benefits and unemployment at the same time. That’s because these workers’ comp benefits require you to be unable to work, while unemployment requires you to be able to work.
However, once you reach Maximum Medical Improvement (MMI) and your temporary benefits end, this may change. MMI is the point when a doctor determines your condition has stabilized. If you still have work limitations, you will switch from temporary disability benefits to permanent.
If you’re receiving Permanent Partial Disability (PPD) benefits: You could also qualify for unemployment. PPD means you can still work under certain limitations. If your employer terminates you because they cannot meet your work restrictions, you may be able to collect unemployment because you are still “able and available” to work within these restrictions.
If you’re receiving Permanent Total Disability (PTD) benefits: You will likely not qualify for unemployment. PTD is given to workers who are fully disabled and cannot work, so you would not qualify for unemployment if your employer terminates you.
Should I File for Unemployment if My Workers’ Compensation Claim Is Denied?
Yes. If your employer denies your claim and you are filing a workers’ compensation appeal, we generally recommend that you also file for unemployment. This could help you receive some income while your case is pending.
Even if you cannot perform your previous job duties anymore, as long as you can perform some type of work, you may qualify for unemployment.
Here are some tips for filing for unemployment when your workers’ comp claim is denied:
- Don’t quit your job. This is the number one thing not to do. Quitting generally disqualifies you from unemployment. It can also limit your ability to receive workers’ compensation benefits.
- Apply as soon as possible. Unlike workers’ comp, unemployment is not retroactive to the date you were off work. It only goes back to the Sunday of the week you filed your claim.
- Don’t lie about your ability to work. You should be honest about your work status and restrictions with the unemployment fact-finder.
It’s also important to note that if you eventually win your workers’ comp appeal, you may have to repay your unemployment benefits to the state. This is because you cannot receive full unemployment and workers’ comp benefits at the same time.
However, don’t worry about losing money. Your workers’ compensation award will cover the amount of unemployment benefits you received for those weeks.
Can I Collect Unemployment After a Workers’ Comp Settlement?
Yes. Once you reach MMI and settle your case, you may be eligible for unemployment if your employer cannot accommodate your permanent restrictions and lets you go.
Again, you should never quit your job without talking to an attorney first. This can hurt your chances at unemployment, as well as affect your ability to collect ongoing disability benefits.
Need Help Navigating Workers’ Comp and Unemployment? Talk With an Iowa Attorney
Have questions about what benefits you should receive after your work injury? The experienced attorneys at Schott Mauss & Associates are here to walk with you every step of the way. Contact us today for a free consultation to discuss your case.
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