Can I Collect Unemployment and Social Security?

by: Bob Skladany, from: AARP, Updated November 2010

Within the past few weeks, I have received a steady stream of questions about collecting unemployment benefits and Social Security retirement income.

This comes as no surprise, since unemployment has increased dramatically at a time when more and more age-62+ Social Security recipients continue to work—and, unfortunately, lose their jobs. Here are some of the more frequently asked questions about unemployment benefits and how they would affect Social Security retirement payments.

Q: Can I collect unemployment benefits if I’m receiving Social Security payments? –Anthony, San Antonio, Texas

A: The short answer is “yes,” in 46 states. Not so many years ago, a federal law required that states offset unemployment compensation benefits in part, or in full, for individuals receiving Social Security retirement payments. A subsequent federal law then permitted states to decide on such “Social Security offsets” through legislation—and thank goodness they did.

Today, only three states, Illinois, Louisiana, and Virginia, retain the “offset” rule. South Dakota has repealed the rule but not yet implemented the change. In these states, unemployment compensation benefits are reduced by 50 percent of your Social Security payment. This can reduce unemployment benefits to near zero for most workers.

In 2002, 22 states still had offset rules, with five of those requiring a 100 percent offset. That meant that if you received Social Security retirement payments and lost your job, you received no unemployment compensation. With the combined efforts of major advocacy groups, including the National Employment Law Project and AARP, most offset laws have been repealed.

“In 2002, we could not have foreseen how radically the economy would change within a few years,” said Clare Hushbeck, who led the advocacy effort for AARP. “The drive to repeal unemployment compensation offsets permits countless Social Security recipients to benefit from employer-paid unemployment benefits free of offsets and allowing them a stronger safety net in the event of job loss.”

Q: I am really confused about whether or not I’m eligible for unemployment because of my work history and a recent move from another state. Where can I start to get some help? –Albert, Tulsa, Okla.

A: Unemployment compensation eligibility and determinations can be very complex. Each state has different rules and policies. Your eligibility for unemployment is principally determined by your new state of residence. So start there by finding your new state on this U.S. map and clicking on the state to find the agency that manages unemployment compensation.