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Disability Benefits

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If you become disabled while you are employed in a position covered under the Wisconsin Retirement System, or WRS, you may be eligible for disability benefits. Except for the special disability benefits available to protective category employees, to qualify for disability benefits you must be disabled from any type of substantial gainful employment. This section provides a basic overview of the disability benefits that are available. Detailed information is also available in the booklet "Disability Benefits" (ET-5102). In addition, watch our on-line videos.

Eligibility for Disability Benefits

To be eligible for a disability benefit from the Wisconsin Retirement System, or WRS, you must be disabled because of a physical or mental impairment which is likely to be permanent. You must also meet a service requirement.

During the period starting seven full calendar years before we receive your disability application, you must have at least one-half year (.50) of creditable service in each of five of the last seven calendar years. If your disability is work-related, you do not need to meet the service requirement. However, we must receive your disability application within 2 years after your last day worked.

The definition under the WRS for disability means the inability "to engage in any substantial gainful activity by reason of a medically determinable physical or mental impairment which can be expected to result in death or to be long-continued and indefinite duration". Before a disability benefit is approved, two physicians must complete and sign our medical report which states that your disability, whether physical or mental, and that the disability prevents you from being gainfully employed.

Your employer must also submit a statement stating you are not expected to resume active service and that they will not contest the disability benefits. We will send an Employer Statement form to your employer.

If you are a protective occupation employee whose condition is not considered total and permanent, you may be eligible for a special disability benefit.

Eligibility for Special Disability Benefits

To be eligible for a special disability annuity from the Wisconsin Retirement System, or WRS, you must be in a protective occupation, such as a firefighter or law enforcement officer, and can no longer efficiently and safely perform the duties of your position. You also must have at least 15 years of creditable service under the WRS and be at least age 50, but under age 55.

If you meet the requirements for a special disability, 2 qualifying medical reports and an employer disability certification must still be submitted to the WRS before the disability can be approved.

Protective occupation employees may also be eligible for duty disability benefits under s. 40.65 Wis. Stats.

How and When to Apply for Disability Benefits

If you think you may qualify for disability benefits, contact the department for disability estimates. We will calculate estimated benefit amounts and send them to you with a packet of information which includes an application, a medical report form, and other relevant information. You can only apply for a disability benefit after your last actual day of work. However, you can submit your application while you are still receiving pay for sick leave, vacation or holiday pay.

There is no minimum age requirement to apply for disability benefits; however, you must not have reached the normal retirement age for your employment category. If you are a general employee or a teacher, your normal retirement age is 65. If you are a protective occupation employee with at least 25 years of creditable service, your normal retirement age is 53. If you are a protective occupation employee with less than 25 years of creditable service, your normal retirement age is 54. If you are an elected official or an executive retirement plan employee, your normal retirement age is 62.

A disability annuity effective date is normally the day after your last day paid. However, it can be no earlier than 90 days before the date we receive your application. Annuities that are not effective on the day after your last day paid must always be effective on the first of a month.

Your benefit will be effective on either the day after your last day paid, or on the first of the month after backdating 90 days, whichever is later. To have the earliest possible effective date, we should receive your application no later than 90 days after your last day paid. Your disability annuity will be backdated to the earliest possible date.

Disability Payment Options

A disability benefit can only be paid as a monthly annuity; you can not receive a lump sum disability payment. The only exception is if you have made voluntary additional contributions, you can withdraw your additional contributions in a lump sum after you terminate employment.

A disability benefit is paid for your lifetime, as long as you remain disabled. A disability annuity is available in the annuity options that are available for a retirement annuity:

Straight life annuity with no death benefit payable.
A life annuity with 60 or 180 monthly payments guaranteed.
A joint survivorship annuity with 75% continued to the named survivor.
A joint survivorship annuity with 100% continued to the named survivor.
A joint survivorship annuity reduced 25% upon either your death or your named survivor's death.
A joint survivorship annuity with 100% continued to the named survivor combined with 180 monthly payments guaranteed.

The booklet "Disability Benefits" (ET-5102) provides a detailed description of these options.

Each disability annuity option consists of two parts. The first is a regular retirement benefit based on your actual age, years of creditable service, and your account balances. The second part is based on the assumed creditable service you would have earned if you continued to work until normal retirement age. The section entitled Calculation of Retirement Benefits in the "Disability Benefits" booklet (ET-5102) provides additional information about how regular retirement benefits are calculated.

How Disability Benefits Affect Sick Leave Credits

If you qualify for a disability benefit, it may be possible for you to convert unused sick leave into credits, to pay for health insurance premiums. You would need to check with your employer to see if they have this type of plan regarding conversion of unused sick leave. If your employer does have a conversion plan, it is your choice to either use the sick leave until exhausted or convert it into credits to pay health insurance premiums. If the sick leave is converted, the disability benefit will begin sooner. Converted sick leave credits can not be used to pay for health insurance premiums until your disability annuity is approved.

If your employer does not have a plan where you can convert your sick leave hours into credit for health insurance premium payments, your sick leave will have to be reported to the retirement system. Your disability benefit can not begin until all sick leave, vacation, compensatory time and holiday pay has extended your last day paid.

Taxability of Disability Benefits

Your disability annuity may qualify for the IRS "Disability Income Tax Credit." To determine the taxable portion of your disability annuity, you will need information on the amount of your contributions to the retirement system. That information is furnished by the retirement system together with your initial benefit check. It will also be provided on the form 1099R that you will receive each January.

For more information on federal income taxes and the tax status of your disability annuity, contact an Internal Revenue Service district office and request Publication 524 "Credit for the Elderly or Disabled".

Disability Benefits if You Return to Work

If you are receiving a regular disability annuity under the Wisconsin Retirement System, your disability benefit will be suspended if you earn more than a specific earnings limit for the calendar year. The limit for 2004 is $10,390.00. This amount will be increased each year by a percentage based on the national salary index.

Earnings for services rendered from any employer must be reported to the retirement system on an earnings certification form. The Department's administrator (currently Broadspire, Inc.) will send this form to you each year. If you reach your earnings limit, your disability benefit will be suspended. Your disability benefit payment will be reinstated the following January 1 unless you terminate your employment at an earlier date. Failure to report your earnings to the retirement system may cause your disability benefit to be terminated.

If you are a protective occupation employee and are receiving a special disability benefit under the retirement system, your benefit will be suspended for any period during which you are employed in a law enforcement or fire fighting position.

Group Life Insurance and Disability Benefits

If you are currently insured under the Wisconsin Public Employers' Group Life Insurance Program, you may be eligible to continue coverage without further premium payments. However, you should continue to pay premiums until this department notifies you that premiums are no longer due.

Premium payments are waived for participants who become totally disabled for an indefinite period of time. To qualify for the premium waiver, your employer must submit a "Group Life Insurance Disability Premium Waiver" form to this department for review. If the waiver is accepted, you will be notified of the coverage amount. If your application for a disability annuity from the retirement plan is approved, no further action is required by either you or your employer.

If you have terminated your employment, you must either submit a life insurance Continuation or Conversion form within the required time limit. Further information regarding your group life insurance options after you terminate employment is available in the brochure "Group Life Insurance After You Terminate Employment" (ET-4104).

If your retirement system disability benefit is not approved, the insurance carrier will require medical proof of your disability nine months after premiums were waived, and every year thereafter, in order to keep the waiver in force.

Group Health Insurance and Disability Benefits

If you are covered under the Group Health Insurance Program administered by the Department, you must continue to pay your monthly premiums through your employer while your disability annuity application is being processed. If you do not pay the premiums, your coverage will lapse. If you have terminated from your employer, you must file a Continuation Application within the required time limit in order to continue your health insurance coverage.

Once your disability application is approved, deductions for your group health insurance premiums will be deducted from your monthly annuity check. If your employer has a compensation plan or contract which provides for conversion of accumulated unused sick leave to pay health insurance premiums, your premiums will be deducted from the value of the converted sick leave credits.

Duty Disability Benefits for Protective Occupation Employees

To be eligible for a Wisconsin duty disability benefit, you must be a protective occupation participant such as a police officer or firefighter. You must have been injured while performing your duties or contracted a disease due to your occupation, and your disability must be permanent.

Your disability must meet one of these conditions; it must cause you to retire from your job, or cause a reduction in your pay or position, or cause a work assignment to light duty, or adversely affect your promotional opportunities within the service.

Applying for Duty Disability Benefits

More information regarding the duty disability benefit is available in the brochure "s.40.65 Duty Disability" (ET-5103). You may also obtain a packet that includes program information, a duty disability application and a medical report by contacting the Department of Employee Trust Funds Post Office Box 7931, Madison WI 53707-7931, or call the department call toll free at 877-533-5020.

Watch our on-line video, 40.65 Duty Disability and Survivor Benefits

You should complete the duty disability application and submit it to the Department. Wisconsin Statutes require that your employer certify that the injury or disease leading to the disability is duty related before the duty disability application is approved by Employee Trust Funds.

You should give the medical report to your primary physician to complete. This report must be signed by a medical doctor (MD or DO). Once the department receives the completed medical report and the duty disability application, we will send a second medical report to you. With a list three physicians approved for your second medical evaluation. One of the physicians named will have to complete and sign the second report. Any cost incurred in acquiring the medical exam and report is your responsibility.

If your duty disability application is approved, your benefit effective date will usually be the day after the last day you received earnings as an unrestricted protective.

If your duty disability application is denied for eligibility and you wish to appeal, you must submit a written notice of appeal to the Department of Workforce Development.

Monthly Payments and Offsets for Duty Disability Benefits

Your monthly salary as an active employee is determined by your employer and certified to the Department of Employee Trust Funds. After your duty disability application is approved, this monthly salary is multiplied by a percentage to determine your monthly duty disability benefit.

State employees will receive 80% of their monthly salary, and local government employees will receive 75% of their monthly salary. However, a local government employee who is eligible for a Wisconsin Retirement System (WRS) disability annuity and/or for Social Security disability benefits would receive 80% of their monthly salary. For local government employees only, a reduction of one-half percent is applied to the 75% or 80% amount for each month of creditable service the participant has over 25 years.

Monthly duty disability benefits must be reduced by any of the following sources of income:

Any Social Security benefits payable to you or to your spouse or dependents based on your work record.
Unemployment Compensation benefits.
Worker's Compensation benefits. The monthly duty disability benefit will automatically be reduced by 5% until a permanent partial disability amount is determined by Worker's Compensation. This reduction does not apply for state employees.
Retirement, separation or disability benefits under a retirement system based on earnings and years of service.
Any earnings from the employer with which the duty disability occurred. This offset is dollar for dollar.
Earnings from any employer or self-employment. This offset is less than dollar for dollar.

The duty disability benefit will be suspended if it is totally offset by other income.

You will be required to submit a certified copy of your most recent state or federal tax return regardless if you had actual earnings.. Annual certification is also required on an annual income certification for offset purposes. The Wisconsin Retirement Board is authorized by Wisconsin Statutes to terminate duty disability benefits for any person who refuses to submit information requested by the Board or who submits false information to the Board.

Taxability of Duty Disability Benefits

This benefit is administered by the Department of Employee Trust Funds and is similar to a Worker's Compensation benefit. Since we are not tax experts and interpretation of tax laws are not under this department's jurisdiction, you should contact the Wisconsin Department of Revenue and the Internal Revenue Service for information about the taxability of your benefits.

Survivor Benefits from Duty Disability Benefits

If you die as a result of an injury or disease for which your disability benefit is being paid or would be payable, and you are survived by either the same spouse that was married to you on the date that you were determined to be disabled under this program, or by unmarried children under age 18, a monthly survivor benefit would be payable.

Your spouse would receive 50% of your monthly salary at the time of your death. This amount would be reduced by any applicable offsets. If you applied for your duty disability prior to May 3, 1988, your spouse would receive one third of your monthly salary at the time of death. In either case, the benefits would stop if your spouse remarries.

If a death benefit is paid to your unmarried children under age 18, 10% of your indexed monthly salary at the time of death would be paid to the guardian each month for each of the your children until the child marries, dies or reaches age 18, whichever occurs first. Survivor benefits will be reduced by any applicable offsets. If you applied for your duty disability prior to 5/3/1988, the amount paid to a guardian for each child is $15 per month.

The total monthly benefit including applicable offsets paid to your spouse and your children's guardian may not exceed 70% (65% if applied for duty disability prior to 5/3/88) of your monthly salary at the time of death.

Long-Term Disability Insurance Benefits

On October 16, 1992, the Department of Employee Trust Funds implemented a new disability program called Long-Term Disability Insurance, or LTDI. The LTDI program will eventually replace the disability program under the Wisconsin Retirement System, or WRS. Persons who were first covered under the WRS on or after October 16, 1992, are only eligible for LTDI benefits. Persons who were first covered under the WRS before October 16, 1992 may currently choose between LTDI and WRS disability benefits.

To be eligible to apply for LTDI you must be disabled, you must have at least one-third (.33) year creditable service in at least 5 of the last 7 calendar years, and your last day worked must be on or after October 16, 1992. If your disability is work-related, you do not need to meet the service requirement. However, we must receive your disability claim form within two years after your last day worked.

LTDI benefits are normally paid until you reach age 65, and may be paid later if you first apply after age 60. Your basic monthly LTDI benefit is 40% of your final average salary, or if you have no coverage under the Social Security program, your basic benefit would be 50% of your final average salary.

In addition to the basic LTDI benefit, until you apply for a benefit from your WRS retirement account, a supplemental LTDI contribution is paid into your retirement account for each month that you meet the criteria for the LTDI supplemental contribution. These supplemental contributions will increase your WRS benefit when you apply. You can apply for your WRS benefit while receiving monthly LTDI benefits; however, the supplemental contributions end when you apply for a WRS benefit, and the amount of the taxable portion of your WRS benefit is offset from your LTDI payments.

More information about LTDI benefits is available in the booklet "Long-Term Disability Insurance" (ET-5314) and in our online video, Long-Term Disability Insurance (LTDI).