Older workers who lose their jobs and want to get the most income possible to survive, often wonder if they can collect both unemployment and social security payments at the same time? The simple answer is yes. Legally you can collect both types of benefits simultaneously. However, depending on which state you live in, the amount of money you receive in unemployment insurance can be decreased based on the size of the payment you receive from the Social Security Administration in retirement benefits. This is the case in Illinois, Louisiana, Minnesota and South Dakota.
Unemployment Benefits Are Not Earnings
No matter the size of the unemployment payments retirees across the United States receive, the Social Security Administration does not reduce the size of their social security payment. The unemployment payments do not push retirees between the ages of 62 and 66 closer to the earnings ceiling that will trigger a reduction in social security benefits because the Social Security Administration does count unemployment payments as earnings. So, retirees can rest assured that even if they get unemployment insurance payments, they can still receive all of the social security to which they are entitled.
Social Security Benefit Eligibility
It’s important to make sure that you’re eligible for Social Security retirement benefits. The following guide will help you determine whether you qualify.
How Unemployment Insurance Works
When people are laid off from their jobs, (if you were fired you most likely will not be able to claim unemployment) and meet the other unemployment program eligibility requirements, they can collect unemployment payments. They can receive unemployment payments for a fixed time, currently it’s 26 weeks. However, economic conditions and several other factors can cause the payment period to be extended. The size of the benefit amount depends on the amount of money they were earning prior to losing their job and the maximum weekly payment allowed by the state in which they live and work.
Many people receiving unemployment benefits often find it isn’t enough to meet all of their financial needs and responsibilities. People age 62 or older can get the additional income they need if they apply for the social security benefits to which they are entitled. However, depending on the state in which they live, a person who begins collecting social security payments could find that their unemployment payment amount may be reduced. Some state government consider a person who is receiving both unemployment and social security payments to be guilty of double dipping.
Wait Before Claiming Social Security
People old enough to qualify for Social Security payments who suddenly find themselves unemployed may want to wait until they have reached the full retirement age, 66 or 67, to claim their social security benefits. Applying for benefits before then will reduce the benefit amount they can receive. For each year before full retirement age a person claims Social Security benefits, the amount they receive is reduced by between 5% and 6.67%. In some cases that can cause the person to lose as much as 25% of the social security benefits to which they are entitled after retirement.
Collecting Both Social Security and Unemployment
In most states it is possible to collect both your full unemployment insurance benefits as well as the entire amount of social security to which you are entitled. Contact your state unemployment office to find out if you are subject to the social security offset law that can cause your unemployment benefits to be reduced by as much as 50% of the social security payment you receive each month. That may result in it making more financial sense for you to wait until you qualify for full social security benefits before you apply. It can mean hundreds of dollars more for you each month.
Unemployment Payments Don’t Impact Social Security Benefits
While the amount of money you receive in social security benefits each month might reduce the size of the unemployment payments you get, the reverse is never true. In no states does collecting unemployment compensation reduce a person’s social security benefits. Money a person receiving social security earns as wages from a job is the only income the Social Security Administration uses when calculating benefit amounts. Money people receive as unemployment payments is not counted because it’s not considered wages.
Learn More About Social Security
You can learn more about things that can potentially impact your social security benefits by creating an online “my Social Security Account” through the Social Security Administration. Whether you currently get social security benefits or not, the account can help you estimate your future benefits aa well as provide an estimate of the amount of social security taxes that’s been deducted from your income so far. The Social Security Administration can also provide you with a benefit verification letter stating if you ever applied for, received or are currently receiving social security benefits.
Answers To Questions About Unemployment
No matter the state in which you live, if you have questions regarding unemployment compensation, contact your local state unemployment insurance agency. They can provide accurate information about filing for unemployment benefits and guide you through the filing process. You can visit the office in person or contact them by phone or online. They can help you understand the necessity for and severe penalties for not declaring all of your income sources when filing for unemployment. A social welfare program jointly run by the federal and state governments, unemployment insurance is designed to provide Americans laid off from their jobs with temporary financial assistance while they seek employment.
When Older Workers Are Laid Off
It can be tough on older worker when they get laid off because its very difficult for people over age 55 to find jobs. While unemployment benefits can help, staying afloat financially on that alone is nearly impossible. Many unemployed Americans over age 62 often consider applying for social security to help make ends meet. The good news is, in most states laid off older workers can qualify to collect unemployment payments and Social Security benefits at the same time. However, they should verify their social security benefits won’t limit the amount of their unemployment payments.