Thursday, October 28, 2010
Virginia social security offset again discussed by AARP
The AARP Bulletin has a story on p 26 of the September 2010 DC Area bulletin, “Benefit cut hits needy”; the online title, in the Virginia section under “states”, is “Social security recipients stunned by reduced unemployment benefits; little known ‘offset’ clause triggered by plummeting unemployment trust fund”, link here.
In January 2010 the trust fund for unemployment benefits in Virginia fell to below 50% of that amount projected to be needed for the year. That triggered a law that reduces a person’s unemployment benefit by 50% of the person’s social security benefit. It is much life the hated “social security offset” of some private defined benefit pension plans.
However Virginia does not reduce unemployment benefits for those receiving both unemployment and private pensions.
Since 2002, 17 states have repealed offset laws, but Virginia is one of five states with such provisions. I see that I have an earlier story about this here April 17, 2010, based on an earlier AARP account.
When I was unemployed and “retired” in Minnesota (in 2002-2003), I collected full unemployment after severance expired, and having a pension did not affect unemployment benefits.
People who started social security benefits early would seem to be penalized under Virginia’s systems (whereas private employers sometimes deduct an offset based on what you can receive regardless of whether you take it). A good question would be whether one could stop the social security benefit in order to receive the full Virginia benefit, but probably not many retirees could afford that.