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Since 2002, 17 states have repealed offset laws, but Virginia is one of five states with such provisions.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.

1 comment:

Lionel Raymond said...

The Repeal of the Virginia “Offset” law concerning Social Security, Railroad Pensions and Unemployment Benefits that is to go into effect July 1, 2001, is based on the underlying premise that it is not fair (or legal?) to discriminate against one class (Social Security recipients) or age group (again, Social Security recipients along with Railroad Pensioners). If it is “not fair” after July 1st, then it is “not fair” before July 1st.
Currently the VEC is collecting “overpayments” made prior to July 1st and subsequent to January , 2010 when the “50% offset” portion of VA 60-2.604 went into effect. The VEC’s poor accounting and IT system did not pick up the Senior Citizens of Virginia involved in the “50% offset” in a timely manner. As result, the VEC now, under the pretext of “law”, is requiring these Senior Citizens of Virginia to repay the overpayments. This repayment is being requested from the Senior Citizens of Virginia who were unaware of the law’s technicalities, or the law itself. These same Senior Citizens, unaware of the law and its ramifications, have spent the unemployment funds for the necessities of life, home, food, medical, and are not in the position to repay money paid before July 1st…the “date of fairness”. Worse, the money paid to them after July 1st will be withheld in total or in part, to satisfy any “overpayment” in their “VEC Account”.
If you are one of these Senior Citizens of Virginia who are currently in a “repayment of overpayments” or are a Social Security recipient that had their unemployment benefits reduced by the “50% offset” provision that was repealed as of July 1, 2011, please e-mail me at We want to gather enough “force” to make the Commonwealth of Virginia, first, SUSPEND the “repayment of overpayments” immediately***, second, address the withholding of 50% of unemployment benefits prior to July 1st and subsequent to the “50% offset” provision going into effect (Jan , 2010) and the payment of those funds unfairly withheld, third, return the recovered overpayments to the Senior Citizens of Virginia as funds “unfairly” collected. Forward a copy of your e-mail to you Delegate and Senator. ALL OF THEM VOTED FOR THE REPEAL. There is no reason that having done half of a good thing, they cannot do the remaining right thing. If you do not know your Delegate or Senator’s e-mail address…tell me in the e-mail and I will forward it to them.
It only took 120 Senior Citizens of Virginia to get the “50% offset repealed!!! There are as many as 34,000 Senior Citizens of Virginia who are affected by this provision on both sides of July 1, 2011. ALL must be heard and heeded.
*** We want to suspend “repayment of overpayments” so that Virginia does not incurred added expense of having to return money unfairly withheld if an addendum to HB2357 and SB 1113 finds the period of pre-July 1, 2011 to be unfair also. The suspension of the “repayment of overpayments” program, if found to be unacceptable by the legislature, could be re-started for less expense than sending out Commonwealth checks for payments of “overpayments” collected. The VEC accounting system, 30 years old and incapable of handling current requirements, including the ramifications of the 50% offset, by their own admission, would only compound the problems created by insufficient consideration of the overall implications of the “50% offset rule of 60.2-604.
Lionel Raymond