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Seniors Fight for Equality in Unemployment Benefits

Seniors and Unemployment

Seniors and Unemployment

There’s a battle being fought in Illinois between older workers and the State Legislature and the Illinois Department of Employment Security (IDES). IDES is the state agency that oversees and manages Illinois’ unemployment insurance fund.

The battle is over something called Social Security Offset found in Section 611 of Illinois’ Unemployment Insurance Act. Social Security offset is a law that allows Social Security benefits to be considered as disqualifying income when a recipient also applies for unemployment benefits.

Section 611 provides:

  • An individual is ineligible for benefits for any week for which he receives disqualifying income in an amount equal to or greater than his weekly benefit amount.
  •  One half of any social security benefits is disqualifying income to the claimant if he is the individual who earned the entitlement.
  •  If such disqualifying income is less than the claimant’s weekly benefit amount, he is entitled to partial benefits if he is “unemployed” during that week. An individual is ineligible for benefits for any week for which he receives disqualifying income in an amount equal to or greater than his weekly benefit amount. If such disqualifying income is less than the claimant’s weekly benefit amount, he is entitled to partial benefits if he is “unemployed” during that week.

How this plays out is when someone receives unemployment they are allowed to work, but earnings from work go into a formula created by IDES. Under the social security offset formula, a person’s weekly unemployment benefit amount is reduced by an amount that represents 50% of that person’s weekly social security payment amount. Illinois one of a few states that allows Social Security benefits to be used as offset income.

Using the formula above, if a claimant is eligible for a $300 weekly unemployment payment and that same person gets $400 a week from Social Security, then $200 a week is disqualifying income and represents the social security offset amount.

After the offset is applied the claimant now gets, she now gets $100.00 as her weekly unemployment benefit payment. In other words, because of the offset law, this person now gets $400.00 less per month. For many people who are older and need to continue to work, that amount can be devastating. It can be the difference between getting medication or not getting medication, eating three meals a day or eating one to two meals a day, and cutting back on other necessities such as heat, lighting use, and housing payments. In some instances, the offset forumal results in a claimant for unemployment receiving a $0 benefit payment as has been the case for some of my own clients.

In Illinois, State Representative Kelly Cassidy and Senator Heather Steans have led the battle to get this draconian law repealed and bring fairness to older workers who are on unemployment through no fault of their own. Seniors who receive Social Security typically work because they must. When they lose their jobs because no fault of their own, and also are penalized in the receipt of unemployment benefits, a tremendous inequity is created and seniors become more vulnerable to living in poverty.

The offset law is defended on the grounds that it prevents double-dipping. But opponents to the law say that Social Security recipients should not be punished for collecting on a benefit they were promised after working and paying into the Social Security system for a number of years. In other words, Social Security recipients earned their benefits and are likewise entitled to unemployment when they meet the criteria for unemployment benefits which is generally stated as: losing a job through no fault of their own, quitting (for a good reason as defined by law) and being actively available and looking for work. An unemployment recipient must also have accrued enough base income through work that is used in calculating the unemployment claimant’s weekly benefit amount.

Local Edgewater activist, Nancy Solomon says of the law: “The offset is age discrimination and totally unfair.”

IDES officials are investigating options to“pay” for the benefits to older workers which would represent only about 1.5% of all unemployment benefit payments.

Solomon adds: “$25 million a year sounds like a lot of money, but it isn’t,” said Solomon. It’s less than one-fourth of the money IDES pays out in one week. This is a moral issue, not a financial one. Repealing the offset means correcting an egregious wrong.”

On Feb. 11, 2014 IDES hosted a public hearing with a recommendation to the General Assembly to repeal the law by Representative Kelly Cassidy and Senator Heather Steans. Advocates of repealing the offset law argue that the $25 million a year would be paid for easily by money IDES is receiving from various sources, including fraud recovery. According to Solomon, “This recommendation has the support of labor, AARP and the Governor’s Office. But the Chamber of Commerce, the National Federation of Independent Businesses and the Illinois Retail Merchants Association refused to support recommendation unless their members receive a $25 million tax reduction.”

Finally, something to consider is that for each working senior, that senior’s employer is paying into the unemployment tax fund. There is no senior exemption for paying into the unemployment tax fund so why should there be a permitted offset for a senior when they need unemployment benefits? What do you think?

DISCLAIMER: NOTHING IN THIS BLOG POST IS MEANT TO SERVE AS LEGAL ADVICE, BUT RATHER, IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY. DUE TO THE CHANGING NATURE OF THE LAW, ALL INFORMATION CONTAINED HEREIN IS SUBJECT TO CHANGE.

 

 


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