boston.com Business your connection to The Boston Globe

AARP hits law that cuts elders' jobless benefits

Group urges end to offset in Mass.

Retired pilot John Philbrook expected to receive about $242 in unemployment benefits after he lost his job last summer, but a little known deduction called the Social Security offset reduced his check to only $92 per week before taxes.

''It was an ugly surprise," said Philbrook, 72, of Marlborough. ''I am not in any way poverty-stricken, but if I were relying on this money completely, I would be in tough shape."

Philbrook, who lost his job at General Aviation Services in Beverly after the company went out of business, is among an estimated 6,000 older Massachusetts workers who can't collect full unemployment insurance benefits. The reason: a state law that deducts 50 percent of older workers' weekly Social Security payments from their jobless benefits, causing such workers to forfeit $7.5 million per year, according to AARP, formerly the American Association of Retired Persons.

Massachusetts is among nine states that still rely on such a law. A 10th state, Ohio, denies jobless benefits to older workers who receive Social Security. AARP has launched a campaign to encourage Massachusetts, Rhode Island, Maine, Colorado, Ohio, Utah, Illinois, Louisiana, Minnesota, and South Dakota to end the laws, which the states passed at the request of federal officials beginning in the 1970s to discourage retirees from ''double dipping" -- collecting two different public benefit checks at the same time.

The US Department of Labor changed its stance in the mid-1980s and said that states could require the offset of some, all, or none of Social Security, prompting several states to do away with the law, according to attorney Rick McHugh of the New York-based National Employment Law Project, a policy and advocacy organization.

Philbrook, a former American Airlines pilot, joined the Beverly company after he retired from the airline 12 years ago. He was receiving roughly $300 per week in Social Security payments when he lost his job, prompting the state to deduct $150 from his unemployment check, leaving him with $92.

''One of the benefits I worked for was an unemployment benefit," Philbrook said.

Two legislative proposals in Massachusetts could lead to a repeal. One, filed by House Minority Leader Bradley H. Jones Jr., a North Reading Republican, would provide enhanced jobless benefits to laid-off older workers. A second bill, filed by Senate Minority Leader Brian Lees, a Republican representing the First Hampden and Hampshire district, would eliminate the Social Security unemployment insurance offset. The two bills have been sent to a conference committee, where they will be combined. The final proposal is expected to be included in the state economic stimulus package, which must be passed by the Massachusetts Legislature no later than July 31. ''There are many senior workers who are trying to make ends meet," said Jones. ''This is a way of providing relief to a population that is at risk."

Jessica Constantino, director of advocacy at AARP Massachusetts, said defeating the offset is important because more US companies are freezing, eliminating, or reducing pensions, forcing retirees to reenter the job market.

''We want this wrong to be changed so that our unemployment system can be brought up to date to reflect the country's aging workforce," she said.

Changing the law to mandate higher benefits to seniors might be less of an uphill battle now than it once was because the state's unemployment insurance trust fund is growing. In November, employer contributions to the fund totaled $136.7 million, bringing total revenue to $1.62 billion, a 15.5 percent increase over revenues collected in the first 11 months of 2004, according to the state Department of Workforce Development.

Diane E. Lewis can be reached at dlewis@globe.com.

SEARCH THE ARCHIVES
 
Today (free)
Yesterday (free)
Past 30 days
Last 12 months
 Advanced search / Historic Archives