Will pension payments hurt my unemployment claim?

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Q. Before I file an unemployment claim for my last job, which was from June 2018 through January 2023, I need to understand what happens because I collect pension and annuity payments from a previous period of employment with a different company, plus Social Security benefits. On Oct. 1, 2015 I began receiving the pension and annuity payments. During 2022, the monthly pension payment was $1,012 and the annuity payment was $87.13. Social Security is $2,334.40 monthly. I do qualify for unemployment based on time worked and the salary, but what happens because of these other payments?
— Changes ahead

A. We’re sorry to hear you lost your job.

There are a few considerations given all your other income.

In New Jersey, your unemployment payments will not be reduced if you receive Social Security benefits, said Joseph Maddaloni, Jr., co-practice chair of the labor and employment law practice at Schenck Price Smith & King in Florham Park.

He said private pension payments may seem similar to Social Security retirement payments, but in New Jersey, they are treated differently.

“The amount of your New Jersey unemployment payments may be reduced by the amount you receive from a pension plan, unlike the case with your Social Security payments,” Maddaloni said. “If you are receiving a pension from an employer whom your claim is based on, your New Jersey unemployment benefits may be reduced by either 50% or 100% of your weekly pension amount, depending on whether both you and your employer contributed to the pension.”

And, he said your New Jersey unemployment benefits may be reduced by 100% of your weekly pension amount if your base year employer contributed the entire amount towards your pension and you contributed nothing.

“If, however, both you and your base year employer contributed to the pension, then your New Jersey unemployment benefits may be reduced by 50% of your weekly pension amount,” he said.

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This story was originally published on March 16, 2023.

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.

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