Federal lawsuit filed to overturn Wisconsin’s ban on disabled people getting unemployment benefits

MADISON, Wis. — A group of disabled Wisconsin workers filed a class-action lawsuit in federal court Tuesday, looking to overturn the state’s ban on people who receive disability benefits from also collecting regular unemployment benefits if they lose their jobs.

Wisconsin state law prevents people who are on federal disability benefits from also getting regular unemployment benefits if they lose their part-time jobs, a blanket ban that attorneys say is one of just two in the country.

“To treat them differently is treating them differently because of their disability,” attorney Paul Kinne said Tuesday afternoon during a press conference in Madison. Kinne, along with employment attorney Victor Forberger who has worked on this issue for years, represents the group.  “In other words, it’s disability discrimination.”

Last year, that law led to a temporary block on pandemic unemployment assistance for people with disability benefits before the federal government reversed course. Now, this class-action lawsuit is trying to get the law itself overturned.

“It’s not just me that’s suffering,” one plaintiff told News 3 Now as they explained how they were continuing to wait for benefits after losing their job in the pandemic. “There’s thousands of people that need help.”

The plaintiffs

John Feriozzi is one of eight plaintiffs named in the court documents, filed in U.S. federal court for the Western District of Wisconsin. He isn’t a stranger to debilitating pain–or trying to keep working through it. With a string of ailments including arthritis, back and joint pain, and multiple surgeries including neck fusion, two rotary cuff surgeries, and forearm surgery in both arms–a judge straight up told him, ‘You’re a mess,’ when he applied for disability benefits more than six years ago.

“It’s quite hard to do anything physical for very long,” Feriozzi explained.

More than 172,000 working-age individuals in Wisconsin used SSDI benefits in 2019, according to the latest available data from the U.S. Social Security Administration–or about 6% of the state’s labor force.*

But for those on benefits who lose part-time jobs, they can’t get the unemployment benefits many others are eligible for–a problem that was magnified during the pandemic. The existing state law led to about 1,500 people on federal disability benefits in Wisconsin being initially denied pandemic unemployment assistance (PUA), according to the Milwaukee Journal Sentinel, until the U.S. Department of Labor reversed course.

Like many others on disability, Feriozzi kept working part-time for years to supplement his income. (In 2019, the Disability Benefits Center reported that the average monthly SSDI payout was $1,234.)

Physical work is painful, but he’s been able to keep a machinist job where he handles smaller, lighter parts. Until the pandemic, that is, when he got laid off. He’s been approved for PUA payments after a hearing to appeal an initial decision that denied them. But even after the 2020 reversal that allowed disabled people to get the extra pandemic assistance not available to regular unemployment beneficiaries, he still hasn’t seen a penny.

“It’s not helping, let me tell ya,” he said. “I still haven’t gotten any.”

Wisconsin’s eligibility ban 

Social security disability benefits cover workers who have paid into the Social Security program already. “People receiving this benefit typically have earned enough “credits” or quarters of work to qualify,” the DWD notes.

In 2013, the Republican-controlled legislature and Gov. Scott Walker signed off on a law banning people on disability benefits from getting unemployment benefits, which they called “double-dipping”. The reasoning, according to a letter to the Department of Workforce Development, was based on:

  • To receive unemployment insurance benefit payments, claimants must state that they are able to work.
  • To receive disability insurance benefit payments, claimants must state that they are unable to work.

The federal guidance for disability benefits allows those on benefits to get part-time jobs and is based on individuals being “unable to engage in substantial gainful activity.” Republicans, however, said getting both benefits if laid off from a job could amount to fraud. The ban started in 2013, but was replaced with a 2015 law that closed loopholes in the original law, effectively sealing off all unemployment benefits from people on disability.

Only North Carolina has a similar blanket ban against disabled people collecting regular unemployment benefits if they lose work, according to attorney Victor Forberger. According to the Wisconsin Center for Investigative Journalism, most other states take a case-by-case approach.

Last year, legislature Democrats introduced a bill that would reverse the eligibility ban, but it failed to gain traction. Additionally, Democratic Gov. Tony Evers included a fix in his 2021-2023 biennial budget, but Republicans removed the measure from the final budget. (Republican leadership could not be reached immediately for comment.)

“There’s no rational explanation for this other than to discriminate against the disabled,” Forberger said.

The lawsuit seeks to both invalidate the law as a violation of the Americans for Disability Act, as well as backpay anyone on SSDI who lost their jobs and were denied regular unemployment benefits in the last six years. (It wouldn’t impact payments made under federal pandemic unemployment programs.)

Additionally, the lawsuit asks for a temporary injunction that would put the law on hold until the lawsuit is concluded. When reached for comment, the Department of Workforce Development said they were aware of the lawsuit and pointed to Gov. Ever’s attempts to introduce a fix in the most recent budget.

“This class action lawsuit gives the disabled workers in Wisconsin a chance at the justice they deserve, to be treated fairly, like any other worker in our state,” Kinne said.

Correction: The lawsuit cites a statistic from the Social Security Administration saying about 156,000 people who are on SSDI benefits also have part-time jobs, a data point originally reported in this article and on-air piece. According to the U.S. SSA, that data only reflects people on SSDI benefits who have a work history. Data about the number of people on SSDI benefits with a part-time job is not available from the federal government.