Workers’ Compensation Benefits in Divorce

 Posted on November 04, 2025 in Property Division

Workers’ compensation benefits protect employees and their families after a workplace injury or illness. These benefits give financial support while a worker recovers, helping cover medical expenses and lost wages. But when a marriage ends, people wonder how these benefits are treated in a divorce.

If you are going through a divorce in Illinois in 2025 and you or your spouse are receiving workers’ compensation benefits or a personal injury settlement, you probably have questions. Our Aurora, IL divorce attorneys can help you understand how workers’ comp and other settlements are handled in a divorce and answer any other questions you have.

Are Workers’ Compensation Benefits Considered Marital Property in Illinois?

Under the Illinois Marriage and Dissolution of Marriage Act, property is categorized as either marital or non-marital during a divorce. Marital property includes assets that were acquired during the marriage, while non-marital property is usually assets one spouse owned before the marriage. Inheritance or gifts that were given specifically to one spouse may also be non-marital property.

Workers’ compensation benefits are usually marital property if the injury or illness happened during the marriage. This means the money—whether it comes in regular checks or one large payment—can be divided between both spouses in the divorce.

If the injury happened before the marriage, or the benefits were paid before the couple got married, the money is usually non-marital property. It belongs only to the injured spouse.

Sometimes, benefits paid during the marriage are counted as marital property if they replace income that would have been earned while the couple was together. Even if the benefits are non-marital, they can still count as income for child support or spousal maintenance under 750 ILCS 5/505 and 5/504. This means those payments can still affect how much support the court orders.

How Do Workers’ Compensation Settlements Affect Property Division During Divorce?

Workers’ compensation benefits can take several forms. These include temporary total disability (TTD), permanent partial disability (PPD), or permanent total disability (PTD) payments. These distinctions can affect how a couple’s money is treated in a divorce.

For example, a lump-sum settlement covering both past and future lost wages may need to be divided between marital and non-marital portions. The court might consider the portion of benefits meant to replace income lost during the marriage as marital property. Benefits for future wages after the divorce will probably be non-marital property. It is best to consult with a family law attorney who can explain how this might impact your case.

How Do Workers’ Compensation Benefits Affect Child Support and Maintenance?

Even if workers’ compensation benefits are non-marital, they can still affect support. Illinois law counts most kinds of income, like disability payments and settlements, when deciding support amounts.

Child Support

If you are receiving regular workers’ compensation checks, those payments can be counted as income for child support payments. If you owe past-due support, the court can issue a withholding order or garnishment directly from your benefits.

Spousal Maintenance (Alimony)

Workers’ compensation payments can also affect alimony payments. The court may include your benefits as part of your total income when determining whether spousal support is fair or how much should be paid.

Medical Expenses

Some benefits are meant to reimburse medical costs rather than replace income. Judges may consider this when deciding how to divide marital debts. In other words, even if your benefits are protected from being divided as marital property, they can still influence the outcome of your divorce in significant ways.

What Happens If a Spouse Receiving Workers’ Compensation Dies Before the Divorce Is Final?

If an employee passes away due to a job-related injury or illness before the divorce is finalized, the surviving spouse may still qualify for spousal death benefits under Illinois workers’ compensation law. That is because a marriage is not legally dissolved until a final judgment of dissolution is entered by the court.

In these cases, the surviving spouse may receive death benefits to help cover lost income, funeral expenses, and other financial losses related to the fatal work injury. If the divorce has not yet been completed, those benefits cannot be denied.

How Are Personal Injury Settlements Treated in Illinois Divorces?

Many people who suffer workplace injuries also have personal injury claims. Like workers’ compensation benefits, personal injury settlements can make dividing marital property tricky in a divorce.

Under Illinois law, different portions of a personal injury award are treated differently:

• Compensation for lost wages during the marriage is marital property because it replaces income that supported both spouses.

• Compensation for wages lost after the divorce is usually non-marital, since it belongs only to the injured spouse.

• Compensation for pain and suffering or future medical care is also non-marital, as those damages are personal to the injured party.

Because these cases often involve several categories of damages, your attorney will need to see the personal injury settlement paperwork to properly advise you and represent your interests.

Protecting Your Injury Settlement in a Divorce

A workplace injury can already place tremendous stress on a family. When divorce is added to the mix, it becomes even more important to plan carefully and have a great attorney on your side. Your settlement or benefits are important to your financial stability. The result of your divorce can affect how that money is shared or used.

If you get workers’ compensation benefits or expect a settlement, work with an attorney who can help you protect that money. Gather all your paperwork, and talk with your personal injury lawyer to understand which benefits belong to you. This will help you make sure the divorce settlement is fair.

Call an Aurora, IL Divorce Attorney Today

At The Law Office of Matthew M. Williams, P.C., our Kane County divorce attorneys have over 20 years of experience helping clients handle complex financial issues in divorce, including how to address injury-related claims and settlements.

We offer free consultations to review your case and explain your options. Our firm is committed to communicating clearly and honestly. We give practical advice and work hard to get fair results for every client we serve.

Call 630-409-8184 today. Let us help you protect your financial future.