Unemployment Benefits for Seniors: Eligibility & How it Works

Unemployment compensation is a program administered by the state whereas Social Security is a federal program. Because these are two separate programs, state laws regarding unemployment insurance benefits vary. In most states, if you continue to work after age 62 and then lose your job, you are eligible to apply for unemployment. It is possible for you to receive benefits from both Social Security and unemployment at the same time.

How Social Security Works

Under Social Security rules, you can both work and receive Social Security retirement benefits. If you take your Social Security early, your earnings reduce the amount of your benefit until you reach full retirement age. In 2020 the annual limit you can earn is $18,240.

Once you reach full retirement age, there is no limit on how much you can earn and still receive your retirement benefit. Social Security can no longer deduct excess earnings from your monthly benefit check.

Seniors who continue to work but then become unemployed can collect unemployment insurance benefits. Unemployment benefits do not count as earnings under the Social Security annual earnings test.

How Unemployment Insurance Works

In the past, if you received Social Security benefits and lost your job, you received reduced or no unemployment compensation. Although guidelines vary by state, most have repealed their offset laws. Because many individuals continue to work after reaching the age when they can receive Social Security retirement benefits, you may still get unemployment benefits depending on which state in which you reside and the amount of the Social Security benefit you receive.

Getting unemployment does not affect your monthly Social Security payment. However, in some states, receiving Social Security or other retirement pension income could reduce the amount of unemployment benefit you receive.

Applying for Unemployment Compensation

If you lose your job because your company downsizes, lays off workers or for another reason that is not your fault, you can file a claim for unemployment benefits. Individuals who get Social Security benefits beginning at age 62, but who continue to work, may qualify for unemployment benefits if they suddenly find themselves out of work.

File your claim during the first week of unemployment to avoid losing benefits. Many states allow you to file a claim online or by telephone.

Be ready to give your name, complete mailing address, daytime telephone number and Social Security number. You must also provide the name, address and Employer Identification Number for your most recent employer. The state employment agency may request additional information when you apply for benefits.

Finding New Employment

Although older workers are less likely than younger workers to get laid off, those who do lose their jobs have a tougher time finding a new job. A study from the Urban Institute found that individuals older than 62 are half as likely as younger workers to get hired. Studies have also shown that retirees often accept employment that pays lower wages than their previous jobs.