Illinois Workers’ Compensation Death Benefits: Eligibility and Deadlines

If an Illinois worker dies from a job injury or occupational disease, the employer’s insurance carrier owes the family Illinois workers’ compensation death benefits: weekly payments equal to 66⅔% of the worker’s average weekly wage, plus $8,000 toward burial costs. A surviving spouse, dependent children, and in some cases dependent parents or other relatives can collect. The claim has to be filed with the Illinois Workers’ Compensation Commission within three years of the death, and missing that window ends the right to any payment.

Who Can Collect

Illinois ranks survivors in tiers. The insurer pays the top tier that has someone in it; lower tiers only receive anything if no one above them qualifies.

A surviving spouse and children under 18 come first. A child stays eligible past 18 if enrolled full-time at an accredited school, with payments running until age 25. A child who is physically or mentally incapacitated remains eligible for life, student or not.¹

If no spouse or eligible children survive, totally dependent parents move into the top slot. They receive the same weekly rate a spouse would have received, and their payments continue for life.¹

Below that are partially dependent parents, then grandparents, grandchildren, and other relatives who relied on the worker for at least 50% of their support. These lower-tier dependents collect a reduced benefit for up to five years. The Commission looks at actual financial reliance on the date of the fatal injury, so anyone claiming dependency should be ready to show it with records.¹

How Much the Weekly Payment Is

The benefit equals two-thirds of the deceased worker’s average weekly wage, calculated from earnings before the fatal injury. A worker who averaged $1,200 a week produces a death benefit of about $800 a week.¹

The rate is bounded by minimum and maximum caps the Commission revises twice a year. As of mid-2025, the maximum weekly death benefit was $1,974.73 and the minimum was $740.53. The rate that applies to a given claim locks in based on the date of the injury or last harmful exposure, and current figures are posted on the IWCC website.²

Burial Payment

Separate from the weekly checks, the carrier owes $8,000 toward burial expenses, paid to whoever actually covered the funeral. It does not count against the overall benefit cap.¹

How Long the Benefits Run

Total payments are capped at the greater of $500,000 or 25 years of weekly benefits. A surviving spouse with a high weekly rate can collect well past $500,000 over 25 years; a spouse with a low weekly rate still receives at least $500,000 before the stream ends.³

A surviving spouse keeps collecting for life or until the cap is reached. If there are eligible children, payments continue at least until the youngest turns 18 (or 25 for a full-time student), even if the spouse dies before that point.¹

Remarriage changes things. If the surviving spouse remarries and no children are still drawing benefits, weekly payments stop and the spouse instead receives a lump sum equal to two years of weekly compensation. If eligible children are still on the benefit at the time of the remarriage, their payments continue.¹

When one beneficiary ages out or loses eligibility, the remaining beneficiaries keep their share. The death of one child does not cut off a surviving spouse.

The Filing Deadline

A death benefit claim must reach the Illinois Workers’ Compensation Commission within three years of the date of death if no compensation has been paid, or within two years of the last compensation payment if any was made, whichever is later. After that, the claim is barred.⁴

Deaths from radiological materials or asbestos exposure follow a longer path: the death itself must occur within 25 years of the last exposure, and from that point the same three-year or two-year filing window applies.⁴

How to File and What to Gather

Claims go on the Application for Adjustment of Claim (Form IC1), available from the IWCC. A family member or legal representative files as petitioner on behalf of the deceased worker.⁵

The form asks for the worker’s Social Security number, a description of the accident or exposure, and the wage information needed to set the benefit rate. Every dependent seeking payment has to be listed by full legal name and date of birth. Pull these documents together before you start:

A certified copy of the death certificate from the county registrar.
The marriage license, to establish a surviving spouse.
Birth certificates for each child claiming benefits.
Full-time enrollment verification for any child between 18 and 25.
For a parent or other relative, financial records showing the worker provided at least 50% of their support, such as bank statements, tax returns, and household bills.

Submissions go through the Commission’s electronic filing system, CompFile.⁶ A filer who cannot use the online system may send paper forms to the Commission by certified mail. Once the filing is logged, the Commission assigns an arbitrator and sends formal notice to the employer and its insurer, which starts the clock on their response. You can watch the case through CompFile for scheduling and document requests.⁷ If the insurer accepts the claim, payments can start before any hearing; if it disputes the claim, the arbitrator sets proceedings.

When Someone Besides the Employer Caused the Death

Workers’ compensation is not always the only recovery. If a third party, meaning anyone other than the employer, caused or contributed to the death, the family can sue that third party for damages while still collecting workers’ compensation. Common examples include a negligent driver in a crash during a work trip, a contractor who created unsafe conditions on a job site, or the maker of defective equipment.

The employer or its insurer holds a subrogation lien on any third-party recovery. If the family settles with or wins against the third party, the employer gets reimbursed for workers’ compensation benefits already paid. The employer owes its pro-rata share of the litigation costs and, unless the parties agree otherwise, 25% of its reimbursement goes to the family’s attorney. No settlement or release of a third-party claim is valid without written consent from both the employer and the claimant. If the family doesn’t pursue the third party, the employer can file the lawsuit itself once the deadline is within three months of expiring.⁸

What an Attorney Can Charge

Attorney fees in Illinois workers’ compensation matters are capped at 20% of the compensation recovered and paid, and the fee cannot exceed 20% of 364 weeks of permanent total disability at the worker’s average weekly wage (subject to the state maximum). Anything above that cap requires a separate Commission hearing.⁹

There is one case where the fee drops sharply. If the employer does not dispute that the death was work-related and does not contest the benefit amount, the Commission limits attorney fees to a nominal amount of no more than $100. If the insurer is clearly on the hook and accepts it, any fee agreement should reflect that.⁹

Taxes and Social Security

Workers’ compensation death benefits are not federally taxable. Under 26 U.S.C. § 104(a)(1), amounts received under workers’ compensation acts for personal injury or sickness are excluded from gross income.¹⁰ Illinois does not tax them either. The whole weekly check and the $8,000 burial payment arrive with no withholding, so the benefit replaces a larger share of take-home pay than the 66⅔% figure suggests. A third-party wrongful death recovery is treated differently: compensatory damages for physical injury stay tax-exempt, but punitive damages and interest on judgments are taxable, so any settlement should allocate between categories.

Survivors can collect workers’ compensation and Social Security survivor benefits at the same time. If a survivor also receives Social Security disability (SSDI), the combined SSDI and workers’ compensation cannot exceed 80% of the deceased worker’s average current earnings; Social Security reduces its payment by the excess until the survivor reaches full retirement age or the workers’ compensation ends. The offset does not apply to VA benefits or SSI. Report changes in workers’ compensation payments to Social Security promptly to avoid overpayment problems.¹¹

If the Employer or Insurer Goes Under

If the employer carried valid workers’ compensation insurance when the fatal injury happened, the carrier still owes the benefits even if the employer later goes bankrupt. The employer’s financial trouble doesn’t release the insurer.

If the insurance carrier itself becomes insolvent, the Illinois Insurance Guaranty Fund steps in. Workers’ compensation claims under the Fund are not subject to the $300,000 cap that applies to many other insurance claims; the Fund investigates, adjusts, and pays as if it were the failed insurer.¹² Self-insured employers that fail are covered by separate state mechanisms. In any insolvency, keep filing and documenting the claim normally. The obligation to pay death benefits survives the failure of the employer or the insurer.

1
Illinois General Assembly. Illinois Code 820 ILCS 305/7 – Workers Compensation Act
2
Illinois Workers’ Compensation Commission. Benefit Rates
3
Illinois General Assembly. Illinois Code 820 ILCS 305/8 – Workers Compensation Act
4
FindLaw. Illinois Code 820 ILCS 305/6 – Workers Compensation Act
5
Illinois Workers’ Compensation Commission. Application for Adjustment of Claim
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Illinois Workers’ Compensation Commission. CompFile Implementation Resources
7
Illinois Workers’ Compensation Commission. CompFile Home
8
Illinois General Assembly. Illinois Code 820 ILCS 305/5 – Workers Compensation Act
9
Illinois General Assembly. Illinois Code 820 ILCS 305/16a – Workers Compensation Act
10
Office of the Law Revision Counsel. 26 USC 104 – Compensation for Injuries or Sickness
11
Social Security Administration. How Workers Compensation and Other Disability Payments May Affect Your Benefits
12
Justia Law. Illinois Code 215 ILCS 5 – Article XXXIV Illinois Insurance Guaranty Fund