In reversal, feds say Wisconsinites on disability can get pandemic unemployment

MADISON -- After months of denials, the door is now open for Wisconsin workers with disabilities to get federal Pandemic Unemployment Assistance (PUA).

In a letter dated July 27, the U.S. Department of Labor reversed course and said people who receive Social Security Disability Insurance (SSDI) meet the PUA eligibility requirement.

Since May, FOX6 has been reporting on SSDI recipients' inability to access unemployment assistance after losing their jobs during the pandemic.

SSDI is a federal program that employees and employers pay into through taxes. If a disability prevents someone from holding "substantial gainful" employment, they can apply to receive SSDI payments.

The program encourages people to work as much as they are able. The standard for "substantial gainful" employment varies from year to year. In 2020, non-blind people with disabilities are eligible for SSDI if they make less than $1,260 per month.

In 2013, Wisconsin passed a law saying people receiving Social Security disability cannot simultaneously receive state unemployment benefits. Lawmakers said the goal was to prevent fraud and "double dippers."

But when COVID-19 hit Wisconsin, people who followed the SSDI program's encouragement to work part-time to supplement their incomes found themselves without jobs and without an unemployment safety net.

While Wisconsinites on SSDI currently remain ineligible for regular unemployment benefits, labor attorneys have argued they should be able to receive Pandemic Unemployment Assistance (PUA) through the CARES Act. PUA is the additional $600 per week the federal government payed in unemployment assistance, even to people who typically do not qualify for state unemployment benefits.

The only other state with a blanket ban on SSDI recipients receiving regular unemployment compensation is North Carolina. While North Carolina interpreted PUA as applying to SSDI recipients, Wisconsin originally did not.

Initially, Wisconsin's Department of Workforce Development said federal law required it to defer to state law regarding SSDI payments. But in May, the day after FOX6 submitted questions about this interpretation, the department started an email chain with the Department of Labor staff who oversees Wisconsin's region.

They responded with guidance that Wisconsin should look to its state law, thus denying PUA payments for Social Security disability recipients. However, that guidance was based on an incorrect summary of Wisconsin law.

"There is not a straight out prohibition of collecting UI benefits if you are receiving SSDI in Wisconsin," the Department of Labor wrote. However, Wisconsin does have such a prohibition.

Department of Workforce Development Secretary Caleb Frostman pointed out the discrepancy in his June 9 letter, asking the Department of Labor secretary to weigh in.

"Region 5's misunderstanding of the ineligibility provision enacted by the Wisconsin Legislature in 2013 seems to have inappropriately affected its guidance," Frostman wrote.

"I am concerned that the interpretation could be viewed as denying benefits based on disability using SSDI as a proxy or as having a disparate impact on individuals with disabilities because all SSDI recipients— by definition—have disabilities," Frostman added later in the letter. "The Department ardently protects against such discrimination and such an interpretation would run counter to that policy."

More than one month later, the July 27 letter from the U.S. Department of Labor appears to reverse course, saying SSDI recipients who are "unemployed, have reduced employment, or are unable to work or are unavailable to work due to  one of the specified COVID-19 reasons outlined in the CARES Act...may be eligible for PUA benefit."

Governor Tony Evers has proposed a package of legislation that would, in part, allow SSDI recipients to receive regular unemployment compensation.

After receiving awaited official guidance from the U.S. Department of Labor, the Department of Workforce Development (DWD) on Monday, July 27 encouraged Social Security Disability Insurance (SSDI) recipients whose ability to work was impacted by COVID-19 to apply for Pandemic Unemployment Assistance (PUA) benefits.

Those who are eligible for PUA may be able to receive retroactive benefits to the week ending February 8, 2020, or the first week an individual is out of work due to COVID-19, whichever is later.

 The Department of Workforce Development said the following in a press release: 

"Wisconsin state law disqualifies SSDI recipients from receiving state unemployment insurance (UI) benefits. A previous interpretation extended this disqualification to PUA benefits, which prevented individuals with disabilities from receiving needed financial support during the COVID-19 pandemic health emergency.

SSDI is a federal program that provides assistance to working-age individuals who have demonstrated an inability to work at substantial levels. The program encourages program recipients to work to their greatest ability.

Governor Tony Evers and Department of Workforce Development Secretary Caleb Frostman, along with U.S. Senator Tammy Baldwin and Representatives Ron Kind, Mark Pocan, and Gwen Moore, have been advocating for SSDI recipients, sending letters to U.S. Department of Labor Secretary Eugene Scalia, arguing that SSDI recipients out of work due to COVID-19 should not be excluded from receiving PUA benefits, especially during a period of public health emergency.

The coalition contended that PUA is intended for individuals who are ineligible for regular UI, including those not covered under state law. With Wisconsin law precluding those individuals who receive SSDI from receiving regular UI, they should be covered under PUA. If Wisconsin SSDI recipients otherwise meet COVID-related eligibility, they should not be disqualified from PUA benefits.

Although contrary to initial interpretations, DWD Secretary Caleb Frostman recognized that fighting for PUA benefits for SSDI recipients was urgently important for the applicants' economic security."