Wednesday, August 17, 2011


From the Financial Times:
Can you be unemployed and retired. . . and collect benefits for being both?

One New York woman who was laid off in 2009 after a 40-year career in philanthropy filed for unemployment while continuing to look for a new job. A year later at age 65 and jobless, she applied for Social Security retirement benefits. She now collects both a monthly Social Security check and weekly unemployment benefits totaling nearly $3,000 a month, and a pension she earned during her career.

With the nation’s fragile economy leaving millions of older workers unemployed, growing numbers of these Americans are double dipping-- collecting unemployment insurance (UI) benefits, which extend for 99 weeks and Social Security. Or, in the case of government workers, collecting unemployment and state, local, or federal pensions. Double dipping is not illegal. And many would feel like suckers if they didn't take advantage of all the benefits that are available to them through the Federal and state governments. But is this any way to run a country at a time of fiscal crisis?
On the other hand, because of my state teacher pension, I'll only see a fraction of what I'd otherwise be entitled to for all those years I paid into social security before becoming a teacher--including those years when I was in the military. The Windfall Elimination Provision was designed to limit my retirement income; and of course, my teacher pension is a windfall. Maybe I'll just go on unemployment.


Anonymous said...

I don't understand the complaint against "double dipping." You work your 30-40 years and the deal is that when you stop working for that organization and/or hit a given age, they will start writing you checks.

You retire and/or hit that age and start collecting checks that the organization promised you as part of your contract.

Why should anyone care if you (a) go work for another organization and still collect your retirement checks from the first organization, or (b) "retire," start collecting your agreed to checks and then go back to work for the same organization [*clearly*, that organization is okay with this or they wouldn't have hired you back]?

I can start drawing down my 401(k) when I hit a certain age and there is no requirement that I stop working before doing so. Other than jealously that someone else managed to find a job with great benefits, who cares?

-Mark Roulo

Anonymous said...

I don't think the best use of taxpayer dollars is to pay the top retirement package to a teacher, who then collects that in addition to the top-level pay for her to teach the same subject (social studies) at the same MS from which she just retired. My former neighbor did that for at least 12 years, until the county cracked down on the practice a couple of years ago, because of budget problems. This is one of the practices that have soured public opinion of government employees. Full retirement benefits for people in their early-mid 50s (graduate from college at 22 and retire in 30 years) is NOT what happens to most people in the private sector; those who are paying the freight. The system is unsustainable.

Darren said...

I agree with you. That situation bears no resemblance to mine at all.

Anonymous said...

"Full retirement benefits for people in their early-mid 50s (graduate from college at 22 and retire in 30 years) is NOT what happens to most people in the private sector..."

The problem (and, presumably, the complaint) would then be about the fact that these folks can retire after 30 years with full retirement benefits. No?

That they can retire and then get another job is pretty much irrelevant.

-Mark Roulo

Anonymous said...

While you can do this in NY, the same is not true in Calif. Most pensions, other than SS and railroad retirement are deducted form Unemployment Insurance in CA. I do not know why RR was exempted, but it does seem fair that SS was. I know many older people who need part time jobs and SS to get by. The thing is you still have to be actively seeking work. I was laid off by Sac-City in '09 and collected UI all summer and then was recalled. It used to be, when I was laid off in '92, teachers had to wait until the summer ended to begin collecting. Makes sense because I ended up collecting 10 weeks of UI that year and didn't miss any work. And, I agree with you that SS offset seems a bit unfair, but if you think about it make sense. The windfall is not your pension, the windfall is that when you became a teacher you stopped paying into SS for the remainder of your working life, while others may have paid into SS much longer. SS wasn't designed to equalize payment between people who stop contributing early and those that work to an older age. Your check would be 6.2% smaller for your entire teaching career and only 4.2% smaller this year because Obama cut the payroll tax by 2%. Anyway, if you think about it, it may turn out to your benefit, especially if you don't live too long after you begin collecting SS. I would rather have the money up front anyway.


Anonymous said...

As a follow-up to my post above about teachers collecting both retired pay and active salary for retiring and continuing in the same postition, I don't fault individual teachers for taking advantage of that option; I do have a problem with the system that forces taxpayers to foot the bill for both retirement at an unreasonably early age and their being retained in the same job and being paid twice for it. Both aspects are unsustainable.