Utah panel supports cut in benefits offset

Some Utah seniors suffering a job loss will be better off financially if the Legislature approves a change in Social Security offsets of unemployment insurance benefits.

The Workforce Services and Community and Economic Development Interim Committee on Wednesday voted to recommend a bill that would cut the offset amount by 50 percent. Utah currently is one of a handful of states that mandates that unemployment compensation be reduced by 100 percent of Social Security retirement benefits.

The current situation has left some seniors with little or no unemployment benefits after the Social Security amounts are deducted. Chris Love, unemployment insurance director for the Department of Workforce Services, said the average senior in that situation nets about $50 per week in unemployment insurance entitlement.

The change, if approved, would be in effect for three years. It was recommended by the Workforce Services Advisory Council at the prompting of AARP Utah.

"I think, in looking at this, the council felt that Utah was a little bit out of sync with what was going on with the rest of the country, that we were one of only a handful of states that still applied a 100 percent offset, and I think they were also persuaded by the argument that many seniors continue to have a need to work once they attain retirement age and there should be some sort of safety net available to them if they find themselves without work through no fault of their own," Love said.

About 20 states have some sort of offset, and about five have it at the 100 percent level.

The change would mean higher costs for some employers, Love said. Having a 50 percent offset level would add $1.1 million per year in unemployment insurance benefit costs, which overall totaled $250 million in 2002.

"I would make the argument that by doing away with the offset that employers would therefore have no incentive to lay off older workers, which you could say that right now they have that incentive because they're not going to incur any additional costs associated with the payment of unemployment insurance benefits," said Tim Shultz, policy analyst with Utah Issues.

Michael Siler, associate state director of public affairs for AARP Utah, also sees no incentive for employers to lay off older workers as a result of the offset reduction.

"In fact, given the demographic shifts, the generation I'm currently in and many of you are currently in is much larger than the generation that's following. And employers just simply are going to have to rely on older workers. You won't have a choice. The baby boom generation is much larger than the generation that follows," he said.

"We really can't see any good reason to offset unemployment by Social Security received."

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