Research & Policy
Policy Matters Ohio

Unemployment bill especially harsh to older workers

December 02, 2015

Unemployment bill especially harsh to older workers

December 02, 2015

A bill that threatens unemployment benefits for all Ohioans disproportionately targets older workers. The legislation, House Bill 394, repeals bipartisan legislation, approved unanimously by both houses of the Ohio General Assembly in 2007. That 2007 legislation eliminated Ohio’s practice of deducting Social Security retirement payments from the unemployment benefits a person earned.

Unemployment insurance and Social Security are both necessary and they’re different. Unemployment insurance exists to stabilize communities, families and individuals. Unemployment benefits partially replace lost income for people who are laid off, remain available for employment and are actively seeking work. Social Security serves a very different purpose: to provide continuing income to older workers in recognition of their social and economic contributions (benefits for Americans with disabilities, called SSI or SSDI, are different from the Social Security retirement benefits we’re discussing here). To qualify a worker must meet certain work requirements and be at least 62 (for early retirement benefits) or between the ages of 65 and 67 (for full retirement benefits), depending on birth year. Social Security claimants are not required to “retire” from the workforce to receive the benefits they have earned. Many continue to work and rely on the income that their work provides.

Older workers make significant contributions to Ohio’s economy and are an increasing share of the state’s labor force. When the General Assembly unanimously voted to allow Ohioans who qualify for both unemployment compensation and Social Security retirement benefits to fully claim both, workers aged 65 and over comprised about 3.8 percent of Ohio’s labor force. Last year, that share had grown to nearly 6 percent. In 2014, more than 334,000 Ohioans aged 65 and over were counted in the state labor force — meaning they were working (320,000 or most of them) or looking for work. In 2014, more than 1.6 million Ohioans over age 65 received Social Security benefits.

Under HB 394, older workers would see their unemployment insurance benefits reduced or eliminated, just because they receive Social Security. These workers rely on their earned income, just like younger workers. Unemployment compensation is designed to soften the damage caused when people lose their jobs through no fault of their own. With the reintroduction of this offset, older workers will no longer have this same protection.

To qualify for unemployment, older workers have to meet the same requirements as younger workers. People who fully retire, are not able and available for work, or are not actively seeking work, are not eligible for unemployment. The eligible are, just like younger workers, seeking to replace lost income so they can manage their financial obligations and household needs while they seek new employment. Unemployment benefits could be the difference between making a mortgage payment, purchasing medication, and keeping food on the table for some elderly Ohioans.

When Senator Joy Padgett, a Coshocton Republican and one of the sponsors of the 2007 bill eliminating the offset, learned about the rule from a constituent, she found it shocking and unbelievable, according to a Columbus Dispatch story. This renewed effort is no less distressing than it was in 2007. Restoring the offset will make Ohio a true outlier among the states. Just as Ohio legislators propose renewing this offset, Illinois, the last state in the nation to use it, agreed to eliminate it. No other state in the nation will be penalizing their senior workforce as harshly as Ohio merely for losing a job through no fault of their own.

Reinstatement of the Social Security offset is just one example of how this bill is an extreme and ineffective solution to unemployment trust fund solvency. Read our initial brief here. Our testimony against this legislation can be found here.

-- Hannah Halbert

Hannah

 

 

 

 

 

 

 

Hannah is Policy Matters workforce researcher.

 

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