Can You Collect Full Unemployment & Army Pension Without Penalties?

If you are unemployed and receive an Army pension, you may still have trouble paying your bills while you look for a new job. Depending on the circumstances, you may be able to collect full unemployment benefits and an Army pension. However, in some situations, your pension benefits may reduce the amount of unemployment compensation you can receive.

Pension Offsets

Under the Federal Unemployment Tax Act, state unemployment departments must offset unemployment insurance compensation benefits if the unemployed worker receives a pension funded by his base-period employer. The law requires states to make this offset only if the base period employer's contributions affected the pension amount received by the claimant, but some states may impose the offset regardless of whether this occurred. In a benefit to the pensioner, the law also allows states to reduce the offset to compensate for contributions the claimant made to the pension.

Unemployment After Military Service

If you are seeking unemployment after receiving your discharge from the military, the state's unemployment department will consider the military to be your base- period employer. Because the military's contributions raised the amount of the pension you are receiving, FUTA requires the state to reduce your unemployment benefits by your pension amount.

Unemployment After Civilian Employment

If you are filing for unemployment insurance compensation after working a civilian job, the military may or may not be a base-period employer. Your base period is typically the first four of the last five quarters before your filing date. If you served in or worked for the military during this time, then the military is a base-period employer and the state must offset your benefits. However, if you didn't work for the military during this time, it is not a base period employer and FUTA won't require the state to offset your benefits.

Considerations

Though FUTA doesn't require states to offset unemployment benefits for claimants receiving pensions that didn't result from base-period employment, some states may elect to do so. In such states, a military pension will reduce your unemployment benefits whether or not you worked for the military during your base period. To collect unemployment benefits based on employment in the military, you typically must have received an honorable discharge, and you must meet all other requirements mandated by your state.

References

• The Military Wallet: Unemployment Benefits After Separating from the Military
• The New York Times: Personal Business; When Pension and Unemployment Checks Don't Mix
• California Employment Development Department: Total and Partial Unemployment TPU 460.55
• U.S. Department of Labor: Pension Offset Requirements Under the Federal Unemployment Tax Act