Workers comp settlement while on EDD unemployment - do I stop certifying?
My situation is getting complicated and I'm not sure how to handle this with EDD. I've been on regular UI for about 8 weeks after getting laid off from construction work. During my previous job, I had a back injury and filed for workers comp (though I was able to continue working with restrictions). Just got a call yesterday that my workers comp case is settling and I'll be receiving a lump sum payment in 4-6 weeks. I've been actively job searching this whole time as required. My question is: once I receive this workers comp settlement, do I need to stop certifying for unemployment immediately? Do I report it as income? Will this affect my UI claim or make me ineligible? I don't want to accidentally commit fraud but also don't want to lose benefits if I'm still eligible while looking for work.
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Kelsey Chin
Workers' compensation settlements are typically NOT considered wages or income for UI purposes. You should continue certifying as normal, but when you get to the question about receiving other income, you MUST report the workers' comp settlement for the week you receive it. EDD will then determine if it affects your UI benefits for that week. The key thing is that receiving a settlement doesn't automatically make you ineligible for continued UI - it depends on the nature of the settlement and how EDD classifies it. Just be 100% honest when reporting it.
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Vincent Bimbach
AuthorThank you so much for the clear explanation! So just to make sure I understand - I keep certifying as normal, then when I actually receive the payment, I mark YES on the "did you receive other income" question and provide the details? And then just continue certifying after that unless EDD tells me otherwise?
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Norah Quay
I had almost this EXACT situation last year! Got a workers comp settlement while on unemployment. What I did was call EDD directly before the settlement arrived to get clear instructions because different types of settlements are treated differently. Some portions might be considered replacement wages (which could reduce your UI) while other portions could be for permanent disability (which typically doesn't affect UI). The agent I spoke with was super helpful and made notes in my file. When I tried calling the regular number it was impossible to get through, but I found this service called Claimyr (claimyr.com) that got me connected to an EDD rep in about 20 minutes. They have a video showing how it works: https://youtu.be/JmuwXR7HA10?si=TSwYbu_GOwYzt9km Trust me, having an agent document everything in your file BEFORE you get the money will save you so much hassle!
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Leo McDonald
This is good advice. Different portions of workers comp settlements are treated differently by EDD. Permanent disability portions generally don't affect UI eligibility, but payments that are specifically for lost wages might reduce your benefits for that certification period. Getting clarification for your specific situation is definitely the way to go.
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Jessica Nolan
u need 2 report it on ur certification when u get it!! i didnt report mine n got hit with an overpayment notice. big headache!!
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Vincent Bimbach
AuthorOh yikes, that's exactly what I'm trying to avoid! Did you end up having to pay back benefits?
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Angelina Farar
I think it depends on what the settlement is for... if it's for pain and suffering it's different than if it's replacing income. My cousin's settlement didn't affect his unemployment at all but my neighbor had to pay some back. The EDD rules are so confusing sometimes!!
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Sebastián Stevens
You're absolutely right! It's all about how the workers' comp settlement is structured. The settlement document should break down what portions are for what purpose. Some portions might be considered wages (which could reduce UI benefits for that week) while other portions like permanent disability or medical expenses don't affect UI eligibility at all. When you report it on your certification, EDD will determine how much, if any, affects your benefits. The important thing is to be transparent and report it when you receive it.
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Bethany Groves
Whatever u do DON'T STOP CERTIFYING!! Even if ur not sure if ur eligible, keep certifying every 2 weeks. U can always cancel or pay back if needed but if u stop certifying and then need to restart its a NIGHTMARE!!!
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Vincent Bimbach
AuthorThat's a really good point I hadn't thought about. I'll definitely keep certifying regardless.
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Leo McDonald
According to EDD guidelines, here's what you need to know about workers' compensation and unemployment: 1. The settlement doesn't automatically disqualify you from UI benefits 2. You must report the settlement on your certification for the week you receive it 3. For a lump sum settlement, EDD will determine what portion, if any, affects your UI benefits 4. If the settlement is structured properly and doesn't include retroactive wage replacement, you may continue receiving your full UI amount Be prepared that EDD might contact you for more information about the settlement. Keep all your workers' comp documentation readily available. As long as you're still able to work, available for work, and actively seeking work, a workers' comp settlement for a previous injury shouldn't disqualify you.
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Angelina Farar
wait so ur saying a settlement might NOT affect unemployment at all?? my buddy told me any workers comp money means unemployment gets canceled immediately
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Jessica Nolan
dont 4get weekly certification asks if ur able 2 work each day! if settlement means ur not able 2 work then u cant say yes to that question
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Kelsey Chin
This is an important distinction. The certification questions about being able and available to work are separate from receiving a settlement. If you're physically able to work and actively seeking work, you should answer those questions truthfully regardless of the settlement. The settlement itself gets reported under "other income" - it doesn't change your work status unless the settlement specifically included a determination that you can't work.
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Vincent Bimbach
I called my workers comp attorney this morning, and she confirmed the settlement is mostly for permanent disability and medical expenses, with only a small portion for lost wages. She said to definitely report it on my certification when I receive it, but to continue certifying as normal. Going to try getting through to EDD this week for additional clarification. Thanks everyone for the helpful advice!
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Norah Quay
Sounds like you're on the right track! When you report it, make sure to have the settlement documents handy so you can answer any questions if EDD contacts you. Good luck with your job search!
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Lourdes Fox
That's great news that your attorney clarified the breakdown! Since it's mostly permanent disability and medical expenses, you should be in good shape. Just a heads up - when you do get through to EDD, ask them to document in your file that you called proactively about the settlement. That way if any questions come up later during an audit or review, there's a record showing you were being transparent from the start. Also keep a copy of your settlement agreement breakdown handy when you certify - EDD might ask for specifics about which portions are for what purpose.
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