Unemployment Insurance and Social Security Retirement Offsets
December 2003
By National Employment Law Project

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The policy of denying or reducing unemployment insurance benefits to Social Security recipients is not widely understood or even acknowledged. According to our research, 21 of the 53 unemployment insurance jurisdictions take some or all of a jobless individual’s unemployment benefits when they are also receiving Social Security retirement benefits. See the attached table for a state-by-state summary.

In today’s labor market, a significant percentage of individuals work after reaching the age for Social Security benefits (62 for reduced benefits, and 65+ (and climbing) for full benefits). With increasing numbers of older Americans remaining in the workforce and many “retired” individuals holding jobs, the denial or reduction of unemployment insurance benefits to jobless older workers due to their receipt of Social Security retirement benefits is drawing increased scrutiny in some quarters. AARP, among others, has turned its attention to the policy and in 2003 three states took action to improve their practices.

The reduction or denial of unemployment insurance benefits due to receipt of other income is termed an “offset.” States with the Social Security “offset” reduce UI benefits dollar-for-dollar, depending upon the amount of Social Security retirement benefits received and the percentage of retirement benefits subject to the offset. States currently offset from 45 to 100 percent of Social Security retirement benefits. Typically, a monthly retirement benefit is converted to a weekly figure and then offset against the weekly UI benefit. As a result, the amount of UI benefits can be reduced to zero in many cases, although a partial benefit is paid in some situations.

For more information contact
Rick Mchugh
NELP's Midwest Coordinator
rmchugh@nelp.org
734-426-6773