What Is Unemployment Insurance?
Before we talk about anything else, let's understand unemployment insurance. The term itself gives a pretty good idea of what you can expect, but to put it simply, unemployment insurance is a form of assistance designed to help workers who may have lost their jobs through circumstances outside of their control without them being at fault.
This may be because they were laid off or dismissed without any specific reason or could not find a job despite being qualified. Different states have different criteria for what circumstances are acceptable for workers to apply for unemployment. There may also be different criteria for dismissals where the worker is not at fault. Therefore, unemployment in one state may differ from unemployment in another state.
Sometimes, there may also be reduced benefits for workers who are still employed but have their working hours reduced due to their employers' decisions.
How Unemployment Insurance Works
Unemployment works very similarly to social security, being funded via payroll. Again, since the program is state-run, the amount you can receive as unemployment benefits vary depending on your state. You may need to have done a minimum amount of work over the past few years to be eligible at all, with some additional requirements.
The amount you receive as unemployment assistance will usually depend on the average income you were working at when you were employed – usually, this is done by looking at a reference period. Unemployment beneficiaries are also required, by rule, to be either looking for work or be available as potential employees if they want to keep receiving benefits.
To be eligible for unemployment, you have to meet certain criteria determined by the state.
Again, since the program is state-run and not federal, like social security, there are certain differences between states' eligibility criteria for unemployment. If you're looking into whether you're eligible for unemployment, you may want to check on the local laws to make sure you meet the requirements.
That said, while there are differences, generally, eligibility relies on a few things:
- You should be a permanent legal resident or a citizen of the United States
- You should be a resident of the state for which you are applying for unemployment
- You should be able to demonstrate a work history that meets the state requirements. This could be that you were working for the past x number of years, or perhaps that you've built a required number of work credits.
- You should be unemployed due to reasons that are not your fault. This could be because of layoffs or any other circumstances that the state considers valid. If you're unemployed, that is, working less than the usual weekly hours, you can also be eligible for unemployment.
Can You Collect Unemployment If You Get Social Security?
In short, yes.
In the past, if you were unemployed for any reason and received social security benefits, there was a very small chance that you'd be able to receive unemployment compensation, and if you did, it would be reduced.
This, of course, depends on the state you're in, as we've mentioned before, but because of the changes in work culture, this law has also changed.
Now that many individuals are working even after the age at which they receive social security benefits, you can very well get unemployment benefits. This will still depend on your state and the amount you receive in social security.
If you are eligible and your application gets accepted, your unemployment doesn't change the amount you receive in social security payments either. However, the opposite could be true. In some states, social security or other sorts of retirement income can end up reducing your total unemployment benefit.
Of course, both of these programs will limit how much income you can earn outside of the program to remain eligible. If you cross these limits, the benefits you receive will witness a reduction, but fortunately, neither of these programs consider the other as income. The SSA will not consider any unemployment benefits you receive as income besides social security.
Applying for Unemployment
If your company downsized recently, and you're worried about what you're going to do now, don't worry. You can apply for unemployment benefits, ideally during the first week of being unemployed, to avoid losing out on any benefits.
You'd have to give some details, such as your name, address, phone number, and social security number. You'd also be required to provide details on your most recent employer, like the name, address, and employer identification number. The agency may also require you to give some additional information at a later stage.
Finding New Employment
As mentioned earlier, you can apply for unemployment and be eligible only if you are willing to be re-employed if you happen to find employment. That being said, while it is less likely for older workers to get laid off and have to apply for unemployment, the ones that do end up losing their jobs do have more trouble finding another job than younger workers.
In fact, research shows that individuals who are past 62 years old are almost 50% as likely to get hired as younger folks. Additionally, retirees also end up accepting employment that pays much lower wages than their previous jobs.
As such, it is true that if you are a senior citizen, you may have a tough time finding a new job, but this does not remove your eligibility to receive unemployment benefits. Therefore, it is not too big a concern, and you can rest assured you will still receive benefits.
Receiving Both Unemployment and Social Security
If you're applying for both unemployment and social security benefits, you'd have to apply separately. The process itself is not very different for either one, and you can do so online, by mail, or even at your local SSA office in person.
Most people will choose to apply for unemployment online, but in some cases, some states require you to be available for a telephone interview to go over some of the details.
Suppose you're already receiving social security benefits. In that case, you don't have to necessarily disclose this information in most states (excluding Minnesota). Still, it is a good idea to make a note of them so that you can make sure any paperwork you need to hand in is available and your application is complete. Good luck!