Retired workers across the country are disproportionately affected when the economy sours, because – unlike active employees – retirees are on a fixed income with limited potential for increase. This is particularly true in a state such as California, which has traditionally experienced a volatile property market, meaning retirees cannot refinance or sell their homes to reduce expenses. Consequently, retirees can find themselves in need of work - but unsure what impact this decision will have on their retirement payments.
Eligibility
Retired Californians are eligible to collect unemployment from another job – while still receiving a retirement pension – if they otherwise meet the unemployment eligibility criteria. Unemployment typically cannot be claimed from the same job the individual retired from, because retiring is a voluntary decision.
However, it is possible there might be some limited examples where a former employee could claim constructive discharge forced him to retire. If an individual is rehired as a retired annuitant – even into the same or substantially similar position as he was formerly employed – unemployment insurance is likely to be payable if the individual is then laid off from that position and continues to look for work.
When a Pension Is Deductible
Under California's unemployment insurance criteria, an individual receiving a pension for prior work – which was entirely funded by the employer – may be required to deduct the amount of the pension from the unemployment insurance payment. This situation only applies where the work as a retiree is for a company connected with the original retirement – such as the original company, or another company which shares the same retirement plan – and the work as a retiree either affected the individual's eligibility to receive the pension or increased his retirement amount.
When a Pension Is Not Deductible
A California pension is not deductible from unemployment insurance when the individual contributed toward the pension. Even if the contribution occurred only infrequently, or at the very beginning of employment, as long as the worker made some type of personal financial contribution toward the retirement plan, it cannot be deducted from unemployment payments. In this situation, the individual is eligible to receive the full amount of unemployment insurance in addition to the full retirement payment he would otherwise receive.
Other Considerations
While it is permissible to receive unemployment insurance and retirement at the same time in California, legislation – such as AB 775 and Section 21223 through 21229 of the California Government Code – prohibits federal, state and local employees from being hired as retired annuitants if they have received any unemployment insurance payments in the 12-month period immediately prior to being hired. Individuals who plan on seeking work after retirement should carefully assess the benefits of claiming unemployment insurance. The short-term compensation might not be worth the potential lost wages over the following 12 months.
Can you get unemployment benefits if you are getting social security? Laid-off workers who receive social security benefits should be able to collect unemployment if they lose their job, as long as they meet the eligibility requirements. In most cases, you can receive both social security and unemployment benefits.
Full unemployment insurance benefits are available for eligible workers who are collecting social security in most states. In the past, there were exceptions in some states where the amount of unemployment compensation was offset by some of the social security benefits that were received.
Note
Eligibility requirements to qualify for unemployment compensation vary from state to state. In most states, you can collect both full unemployment benefits and social security. Check with your state unemployment office for details.
Social Security Offset Law
Previously, in some states, the amount of unemployment compensation was partially offset by the sum of social security payments that were received. In those locations, unemployment could have been reduced by 50% of your social security benefit.
It is called the "offset law" and, in the states where it was in effect, part of social security payments are counted as disqualifying income when calculating unemployment benefits.
Unemployment Benefits' Impact on Social Security
While social security benefits might reduce your unemployment benefits (depending on which state you live in), collecting unemployment compensation won't reduce your social security benefits. That's because social security only counts wages as income when calculating benefits. Unemployment is not considered salary and, therefore, it is not counted.
Social Security's Impact on Unemployment Compensation
If you are collecting unemployment and receiving social security, check with your state unemployment office for information on how your unemployment compensation benefits are impacted. It's possible that the income you receive from social security may impact the amount of unemployment you receive.
Disqualifications for Unemployment
There are also circumstances when you might be completely disqualified from unemployment benefits. These include insufficient earnings, being fired for cause, or quitting without a good cause. Other disqualifications include being self-employed or leaving to attend school. Click here for an even longer list of unemployment benefit disqualifications.
If you file for unemployment and your claim is turned down, you can choose to file an unemployment appeal if you believe you should receive unemployment. The process varies depending on the state, but the general steps are the same.
When you file an unemployment appeal, you will attend a hearing (an informal trial held before an unemployment appeals board or judge) and testify as to why you believe you are entitled to unemployment insurance benefits. Your former employer will also testify. Here is more information on how to file an unemployment appeal.
How to File for Unemployment
Eligibility for unemployment, the length of time one can receive unemployment, and the total amount of benefits received, vary state by state. The amount you will receive also depends on how much you earned at your former job.
You need to open a claim to apply for and begin collecting unemployment. For more information, check your state unemployment office website for information on what's required to file a claim in your state.
Learn More About Your Social Security
One way to learn more about your social security situation and how social security benefits might affect your unemployment benefits is to create a “my Social Security Account." It is an online account run by the Social Security Administration. You can create an online account, whether or not you currently receive social security benefits.
With a “my Social Security Account,” you can estimate your future benefits and get an estimate on the social security taxes you have paid so far.
You can also receive a benefit verification letter. This letter will state whether or not you are currently receiving, or have ever received social security benefits. It will also state whether you have applied for benefits but have not received them yet. The letter will include the dates you have received these benefits.
The information contained in this article is not legal advice and is not a substitute for such advice. State and federal laws change frequently, and the information in this article may not reflect your own state’s laws or the most recent changes to the law.