Can I Collect Unemployment in the State of Rhode Island if I Receive a Retirement Package?
The Rhode Island Department of Labor and Training administers the state's Unemployment Insurance program. Approved applicants can collect up to 26 weeks of benefits and may receive between $68 and $551 weekly as of September 2011, plus dependency allowances. According to Chapter 28-44 of the Rhode Island Statutes, unemployed claimants receiving pension or retirement benefits may be eligible to receive unemployment insurance benefits. If your employer gave you a retirement package before terminating you, you remain eligible to collect unemployment benefits.
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Overview
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Pursuant to Chapter 28-44 of the Rhode Island Statutes, Employment Security -- Benefits, the Rhode Island Department of Labor and Training considers pension benefits and retirement compensation disqualifying income. Disqualifying income can reduce your weekly unemployment benefits. Furthermore, you may be ineligible to receive unemployment benefits if your pension or retirement benefits exceed your weekly allowance.
Initial Eligibility Rules
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The Rhode Island Department of Labor and Training conducts an initial review when you first file your application for unemployment benefits. The department will confirm that you are monetarily eligible and earned enough wages during your base period of employment or at least 20 times the state's hourly minimum wage rate. The department will also contact your previous employer and verify you meet the state's employment separation eligibility rules. The department will ask your employer if you accepted a retirement or severance package. If your retirement or severance package provides you with periodic severance retirement or pension benefits, you may receive reduced unemployment insurance benefits.
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Retirement Benefit Reductions
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If you receive pension or retirement benefits for any weeks that you simultaneously receive unemployment insurance benefits, the Department of Labor and Training will reduce your weekly benefits. The department divides your weekly retirement benefits in half and reduces your weekly benefit allowance by that amount. However, the Rhode Island Statutes contain exceptions to this reduction requirement.
Limitations
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If you contributed to your pension benefits or retirement compensation plan, the Department of Labor and Training will not reduce your weekly unemployment insurance allowance. If you receive Social Security retirement benefits, the department will not reduce your weekly unemployment benefits. Thus, the department will reduce your weekly unemployment allowance for retirement income if you receive non-Social Security retirement benefits and only if you did not make self-contributions to your retirement plan. If your employer funded your retirement benefits without your personal contributions, you may be eligible to receive your entire unemployment allowance.
Other Factors
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If you retired after accepting your employer's retirement package offer, you may not have a valid reason for terminating employment. If your employer forced you to retire, your employer's actions may be in violation of federal equal employment opportunity regulations prohibiting mandatory retirement, and you may be eligible to receive unemployment insurance benefits. Mandatory retirement is typically a valid reason for terminating employment.
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References
- Rhode Island Department of Labor and Training: Unemployment Insurance Frequently Asked Questions
- Rhode Island Department of Labor and Training: Rules of the RI Department of Labor and Training for the Unemployment Insurance and Disability Insurance Programs
- Rhode Island Department of Labor and Training: Your Benefit Rights
- Rhode Island General Assembly: Employment Security -- Benefits
- Rhode Island General Assembly: Employment Security Benefits, Section 28-44-19.1 -- Disqualifying Income
