Can My Unemployment Insurance Benefit Be Cut If I Collect Social Security?

Q: I'm a resident of Virginia, and I've been receiving full unemployment benefits for about two months now. I recently received a letter saying the state would have to start paying me only 50% of what I was getting because they believe I may be receiving Social Security benefits.

The fact is, in 2006 I lost my wife, so my two sons are collecting survivor benefits. I know that's probably what they're talking about. The check comes to me because they are minors, but it is for them. So my question is, does the fact that my kids receive survivor benefits affect how much unemployment insurance I receive? --JD, via email

A: No. Social Security survivors' benefits should not have any impact on your unemployment insurance.

You're almost certainly right about what prompted the letter. Virginia does reduce your unemployment benefit by 50% of your weekly Social Security retirement benefit. It's one of only five states in the nation that still has a law off-setting unemployment insurance for Social Security benefits. But there's no offset for your sons' survivor benefit.

For other readers who don't know, surviving children who are under age 16  -- and disabled children of any age -- are eligible for a Social Security survivor benefit based on their deceased parent's work record. A widower who has minor or disabled children in his care is also eligible for a survivor's benefit as the adult who is responsible for them. (The same is true for a widow.)

The Social Security payment you get as a widower with minor children will end when they're no longer minors. In any event, it is not a retirement benefit and therefore should have no effect on your unemployment benefits.

The five states that still have Social Security off-set laws for unemployment insurance are Illinois, Louisiana, South Dakota, Utah, and Virginia. ***

In the past, I've written that only four states still have these offset laws. I was wrong not to include Virginia and South Dakota.

Virginia's original 100% offset -- which subtracted your entire Social Security retirement benefit from your unemployment insurance benefit -- was changed to a 50% offset in 2003, and eliminated in 2005. But Virginia reinstated the 50% offset last summer. In many cases, of course, that reduction effectively eliminates unemployment benefits.

South Dakota repealed its offset law in 2006 -- but that repeal was only to become effective when the state's unemployment trust fund reached a balance of $30 million. That never happened. South Dakota still reduces a claimant's unemployment benefit by 50 cents for every dollar of Social Security he or she receive, says Rick McHugh, a staff attorney at the National Employment Law Project.

***The original post incorrectly included Colorado among the states that still have a Social Security offset law. Colorado repealed its law late last year.

Please send your questions to [email protected].  I'm sorry I can't respond personally to every email. Questions are only addressed online.(c) Lynn Brenner, All Rights Reserved

 

Comments

[JC]

I just started collecting unemployment from my job and I was told that when I reach 60 I can collect a widower's pension from my wife's passing. Will I still be entitled to my unemployment check?

[lynn brenner]

Lynn replies:

Yes, you will. The state off-set rules I've described above apply to your own Social Security benefit, but not to survivor's benefits. You should have no problem!

[Sandra]

I have been receiving unemployment insurance for the past six months. I'm considering applying for my ex-husband's Social Security survivor's benefits. (We were married for 21 years, so I qualify) I'm 63 years old and could use the money to offset my unemployment until I find another job in my field. Will I still be entitled to my unemployment?

[Lynn Brenner]

Lynn replies:

Yes. See my answer above: The state laws that reduce your unemployment insurance if you collect Social Security do not apply to survivors' Social Security benefits - only to those based on your own work record.

[elaine mitzner]

In NY State , can you receive Social Security and full unemployment benefits at the same time?

[Pat O'Brien]

I live in Illinois and am collecting Social Security benefits. I am still employed part time but my job is being eliminated in a month. I am under the impression that Illinois is only one of a handful of states that offsets Unemployment Insurance due to Social Security. Is that the case? I am 75 years old and work because the SS is not sufficient for me to live on. Do I have any recourse?

[mike wilson]

i am receiving unemployment insurance benefits in colorado. i am 62 and want to apply for early social security benefits (i need the money to live, until i find another job). will there be any offset to my benefits. i realize that you said colorado had no offset (as of 2010). is the law still in effect or is there now an offset (as of feb 2012)? thanks for your help