Q: I'm 63, married, and recently earned about $24,000 a year until I got laid off in March. My wife is younger but only receives a small income from providing part-time day care services. We don't have any savings. I'm not receiving any Social Security now. Can I receive Social Security benefits and get unemployment benefits?
A: You can receive Social Security benefits and unemployment benefits at the same time. But depending on the state where you live, the unemployment benefit amount might be reduced by receipt of a pension or other retirement income like Social Security.
The "offset" rules for unemployment affected large numbers of seniors during the recent period of high unemployment. In Virginia, for example, the state unemployment insurance reserves dropped so low that a state law was triggered requiring cuts to the unemployment benefit payments of Social Security recipients in January 2010. By October, 30,000 jobless seniors in Virginia had been affected, and the offset completely wiped out the unemployment benefit of an additional 4,000.
In Virginia the law reduced unemployment benefits by half of a person's Social Security check. For example, someone who received $1,000 per month in Social Security lost $500, or $125 from each weekly unemployment check. Social Security recipients were rightfully outraged and successfully lobbied the Virginia legislature for repeal of the unemployment "offset" rule. That repeal is now effective in Virginia and numerous other states. Check with your state unemployment commission to learn how Social Security might affect your unemployment benefits.
Depending on your health, it might be to your advantage to start unemployment benefits and delay taking Social Security right away. Allow several months to search for a new job. The longer you can postpone starting Social Security, the higher your benefit will be. In addition, should you find a good job and start working again, your Social Security benefits could be reduced by excess earnings. If you are under your full retirement age you may earn $15,480 in 2014 ($1,290 per month) before Social Security would withhold $1 in benefits for every $2 over that amount.
For more information about Social Security, visit www.SocialSecurity.gov or call 1-800-772-1213.
For unemployed seniors, here are three of the best online resources when looking for jobs: