12 May Can I collect unemployment and a pension at the same time?

Q. If a person is a retired state employee, firefighter, police officer and they collect their pension monthly but also worked a job, but is not working now because of the coronavirus shutdown, can that individual collect unemployment benefits?
— Staying at home

A. The fact that you are drawing a pension should not prevent you from filing for unemployment if you are no longer working because of the business closures caused by the coronavirus mandates put into place by the State of New Jersey.

But you must be sure you qualify for an unemployment benefit first.

In order to submit a claim, an individual must have earned a minimum of $200 per week for 20 weeks during the base period or at least $10,000, said Claudia Mott, a certified financial planner with Epona Financial Solutions in Basking Ridge.

The base period is counted as the first four quarters of a five-quarter period which ends on the date you submit your claim.

“The State of New Jersey pays a maximum of 60% of average wages for 26 weeks, with a cap on payments of $713 per week,” Mott said. “The recently passed CARES Act provides for an additional $600 per week in unemployment payments through July 31, 2020 and extends the length of time for each state to make payments by 13 weeks.”

It also opens up eligibility for workers that don’t qualify for regular unemployment benefits, such as gig workers and the self-employed.

Mott said your pension may reduce the amount you receive for unemployment.

“New Jersey requires that unemployment be reduced by 100% of the value of your weekly pension payment if contributions to the pension fund were made solely by your employer,” Mott said. “The reduction is 50% if both you and your employer contributed and there is no reduction if your employer made no contributions.”

If your weekly pension payment exceeds the cap the state will pay — $713 — and the plan was 100% employer-funded, your state unemployment benefit could be eliminated, Mott said.

The best course of action would be to contact the New Jersey Department of Labor by visiting its website to find the appropriate phone number for your region. But keep in mind the phones have been slammed because of record unemployment filings in the state. You may need to apply and wait for an agent to call you if there are questions about your application.

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This story was originally published on May 12, 2020.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.