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How does Social Security and Retirement Payments Affect Unemployment Benefits?

Updated : September 23rd, 2020

In tough economic times, more and more elder people might search for work past customary retirement age. In case they become jobless and do not have sufficient in the way of Social Security payments and other retirement income, they could attempt to collect unemployment benefits as a means to boost their monetary standing. For the majority, collecting both Social Security and unemployment is allowable.

Social Security is a part of the retirement plan of about every American worker. It is the publicly financed system established in 1935 that offers monthly retirement income to 48 million Americans, together with 35 million retirees, 6 million disabled adults, and 7 million orphans and widows. In case you are among the 96% of workers who are covered under Social Security, you should recognize how the system works and what you should obtain from Social Security when you stop working.

You can receive unemployment insurance benefits and social security benefits at the same time. Unemployment benefits are not counted under the Social Security yearly earnings test and thus do not have an effect on your receipt of Social Security benefits. However, the unemployment benefits sum of a person may be reduced by the receipt of a person or other retirement profits, including Social Security. You must get in touch with your state unemployment office for information on how your state applies the lessening.

In effect, Social Security works as a national income insurance program, grouping risks together and providing least income support. The system is “social” in that almost every American adds to it and in turn is entitled to obtain benefits. The system offers “security by guaranteeing retirees a minimum, inflation – adjusted profits for life, as well as monthly income for those who are unable to work and disabled, and those who have lost a parent or spouse.

Social Security was not planned to be the only assistance for anybody, but just to complement personal savings and pensions. Nevertheless for two –thirds of retirees, Social Security is the main source of income. For one-third of retirees, Social Security offers more than 90% of their income.

Fundamentals

States put their own criteria for unemployment benefits eligibility. Nearly all discriminate between retirement income, for example pensions, and Social Security Benefits. Regarding pensions, many states lessen unemployment benefits by a dollar for every dollar the employer has contributed to the pension. As of 2011, 43 of 50 states never decreased unemployment benefits to Social Security receivers.

Exceptions

Louisiana, Illinois, Utah, and Minnesota reduce UB by 50% for applicants who obtain Security payments. Minnesota gives up the 50% reduction if the applicant earned wage credits for Unemployment benefits eligibility while already entitled for Social Security payments. Virginia and South Dakota impose a 50% reduction for Social Security recipients, based on the amount of money in the state unemployment fund. South Dakota, for instance stops imposing reduction if the unemployment trust fund balance at the end of a calendar quarter is $30 million or more.

Considerations

Recipients of Unemployment Benefits are eligible as long as they are able to work full time, enthusiastically seeking a permanent job and available to accept any appropriate job offer. Claimants who are old enough to obtain Social Security payments must ensure they energetically pursue full-time employment. Their state might rule them not eligible if they are willing to work only certain hours or days, have no way of getting to work or have duties or other situations that restrict their time, They must be ready to offer proof of a job search, such as contacts they made, upon request by their state unemployment agency.

Effect of Social Security Payments

Social Security payments are at times treated different from retirement payments in general.

The following table indicates the shows the extent, if any, by which the weekly benefit amount is reduced due to the receipt of Social Security payments.

TABLE (EFFECT OF SOCIAL SECURITY PAYMENTS)

Retirement Payments

FUTA wants states to lessen the weekly benefit amount of any person by the amount, assigned weekly, of any governmental or other individual, retirement or retired pay, annuity or any other alike periodic payment which depends on the previous work of such individual. This requirement applies solely to payments made under a plan contributed or maintained to by a chargeable employer or base period which influenced eligibility for or increased the sum of the retirement pay. States are allowed to lessen benefits on less than a dollar – for – dollar basis by considering the contributions made by the worker to the plan which means the FUTA requirement is restricted to 100% employer – financed pensions.) Also, the necessity applies only to those payments on a periodic basis. Consequently, the states may select from a range of options, creating a retirement pay provision.

In the year, 2008, FUTA was adjusted to forbid reductions for pensions, retirement or retired pay, annuity, or other comparable payment which is not included in the gross income of the person as it was a part of a rollover distribution.

TABLE (EFFECT OF RETIREMENT PAYMENTS)

Supplemental Unemployment Payments

A supplemental unemployment payment plan is a system in which under a contract payments are made from an employer. The reason is to provide the worker, while unemployed, with a combined UI and supplemental unemployment benefit payment amounting to a definite proportion of his weekly earnings while employed.

There are two main types of such plans:

  • Those of the Ford – General Motors type, under which the worker has no vested interest and is entitled for payments only if he is jobless by the company and
  • That under which the worker has a vested interest and many gather of he is laid off for other reasons such as permanent separation or illness.

All states apart from Puerto Rico, Mexico, South Carolina and South Dakota allow supplementation by Ford – General Motors type plans without have an effect on UI payments.

Some supplemental unemployment benefit plans of the Ford- General Motors type provide for optional payments or alternative private payments in a state in which a ruling not allowing supplementation is issued. These payments may be made in sum equal to three or four times the regular weekly private benefit after two or three weekly payments of State Unemployment insurance benefits; in lump sums when the suspension ends or the state benefits are worn out (whichever is earlier); or through alternative payment arrangements to be worked out, based on the particular supplemental unemployment benefit plan.

The Bottom Line

The consequence of Social Security payments on unemployment benefits is unlike from the consequence of Social Disability Insurance or Supplemental Security Income. In majority of the states, any form of disability payments might ban a claimant for failing to qualify for taking up a full-time job. Some states allow claimants with disabilities to obtain Unemployment Benefits only if they do not turn down jobs that can have room for their disabilities. These states are Delaware, Idaho, Alaska, Hawaii, Nevada, North Dakota, Maryland, Vermont, Tennessee and Massachusetts.

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  1. So I have been getting ue for 6 months and on Oct 21 I had a fact finding issue found and cleared after taking a month, I got put on hold I got nothing no benefits nothing because I am on hold until cleared up and it was another month later in my favor, I’ve been without payment since Oct 21 since then I have been on HOLD, I am beyond pissed, I call every Fri I see the letter I received saying its in my favor that says I am Monetary Eligible-yet I still have 6 payments on hold. I call DEO and I talk, I beg and I get told “we are working on it”, the letter is in my favor I am poor not rich I am poor Why how do you people get away with this

  2. Hello

    I’m 59 years old and was laid off in March 2020 due to Covid.
    In June 2020 I was advised my job was eliminated and there is no chance of me
    Being brought back. I’m collecting UI since March.

    Pondering the thought of taking my early retirement pension as I can’t survive on
    UI any longer. My pension is of course reduced due to my age. Full pension is age 62.

    If I apply for early reduced pension in this situation, does my UI benefit get decreased? I’m in New York.
    I’m still looking for full time work. No luck.

    Thank you so much
    Lorraine

  3. i was just layed off from my job, i did collect benefits in pa. my job is seasonal igot unemployment payments in jan. to april i had 26 weeks of unemployment , but only used about 13 weeks, and was called back to work. i received 2 weeks of 600 dollars of stimlus money. my question is now that i reopened my 2020 claim . i,m i still elegibe for any more stimlus payments along with my regular unemployment payments.

  4. I am 65 yrs old in California and being layed off in Dec 2020. If I apply for unemployment benefits and collect a company pension, will the pension reduce the unemployment benefits ? If you answer call unemployment what is the department or do you have a phone number for a help line. I have called and get automated questions that do not apply to my situation.
    Cannot get to a live person.

  5. Several years ago I was part of a reduction in force and was early-retired for pension purposes. I count on this small pension ($2K/mo) to supplement my employment which has been inconsistent this past two years. I am filing for UI in IL and I qualify for it, but they are saying my pension reduces my UI benefit to zero. Is that right?

    1. Mike,

      That is partially right. The pension will have an impact on UI benefits. Please check for relevant info on the Unemployment Office’s website.

  6. I have $219.00 left on my UE and still no work due to covid-19 will i be able to get a extension on my UE and will it cover the last two weeks. I request payment tomorrow.

      1. My benefits have expired, still.unemployed due to over 65, wdiebrtes, high blood pressure and have one kidney, Can I get PUA , Cares Act for any assistance

  7. im working at a place i have been layed off from a lot in my career.i got 30 yrs in there so i can retire now but need another job to make it hoping to stay working and get more hours.If i take a new job and get layed off there I will BE DRAWING 1400 A MONTH FROM THE JOB I WORKED 30 YRS would i be able to draw unemployment if the new job lays me off and would it be reduced because of my retirement money of 1400 month.

  8. My bf was laid off in April he got the the 600 to start with now he is only getting the unemployment and no extra when we hear ppl getting 3 checks totaling 40k that might be lies but still that is bullshit.

  9. I Sharon Bland or Sharon Scott or Sharon Ann Mccraw
    Use my phone to claim two of my boyfriends and my own benefits. Is that ok ?

  10. I’m getting pua on employment and it was supposed to be backdated to May 27th when I wasn’t ableable to start my new job and somehow it’s August 24th they said it would be backdated been sending messages and pua people keep saying they have emailed you guys too but nobody gets back to me who do I need to contact about this thank you

  11. I check my checking account balance every week but I cannot tell if I am getting my 300.00 extra unemployment. Also. How can I tell if I got my back time unemployment .

    1. Thelma,

      I did not understand what you meant. Please reach out to the Unemployment Office for precise answers to all your questions.

  12. I have exhausted my UI and all extensions. Not eligible for Fed Ed. Does EDD open a PUA claim for me. Or do I have to aoole for it. Its been past 30 days since receiving my Fed Ed denial letter.

  13. i have been unemployed for the whole year almost and since i have been trying to distance myself to better my all around health, it took me this long to file for benefits, i was hoping to get back pay all the way to the beginning.

    1. Zach,

      To qualify, the claimant is required to have sufficient earnings/employment during the “Base Period”. Please use the “Benefits Calculator” available on this website for more.

  14. Thank you o much for investigating this. When I received an overpayment statement and my benefits where stopped I felt my heart drop to my stomach. Already being evicted by a slumlord and now no income, i had to start working when i feel very at risk for getting the virus because of pre-existing conditions and the reason for filing in the first place. i am a cosmetologist and considered non-essential. I feel utterley hopeless and helpless in this situation.

  15. I cannot contact anyone in the unemployment offices because the phone hangs up on me in all cases after listening over and over the recorded message. I have called three numbers .

    I have received pandemic unemployment since March 31st. There was a pending adjudication but I never received any questions, letters nor emails about it and I was approved and paid. Now…this is what the website says:
    7 of 7 entries
    Issue Identification Number Employer Name Issue Type Status Date Mailed Level
    0002 7693 59-01
    PUA Pending 11/16/2020 Adjudication
    0002 4773 71-01
    Program Integrity Mailed 11/6/2020 Adjudicati
    Claimant Inbox
    Select the Search button to display your action items. To narrow your search, input issue date range below and select the Search button.
    Issue Date: From: To: 11/6/2020 to 11/16/2020
    Inbox
    • Below are the items that require your attention and that you need to take action on for your claim.
    • Select the Document ID
    I need this money to survive as others do while I am trying to re-establish any contract freelance work I am capable of doing….I report my small jobs as I get them but they do not come close to equaling my unemployment as of yet. Please tell me where I can go to find out what is needed here.

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