Social Security is a federal program that provides retirement, disability and survivors' benefits to qualifying taxpayers. Unemployment is generally a state-managed enterprise that makes regular payments to taxpayers who have recently become jobless. Some taxpayers qualify for both types of payments simultaneously. However, unemployment benefits in New Jersey can be reduced if you receive a certain type of retirement payment at the same time.
Effect of Social Security
New Jersey state law provides for the reduction of unemployment benefits in certain situations. Since the purpose of unemployment is to provide you with payments if you have no income, receiving an income from a job or from an employer's pension may invalidate your ability to receive state unemployment payments. Since Social Security retirement benefits are effectively pension payments, it may make sense that they reduce unemployment benefits. Nonetheless, in the State of New Jersey, your unemployment payments will not be reduced if you receive Social Security benefits.
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Pensions and Unemployment
Private pension payments may seem similar to Social Security retirement payments, but in the state of 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. New Jersey state law requires a 100 percent reduction in your unemployment benefits if only your employer contributed to your pension and a 50 percent reduction if both you and your employer contributed to the plan. However, if you were the sole contributor to your pension, your pension payments will have no effect on your New Jersey unemployment benefits.
Qualification for Unemployment
The qualification process for unemployment in New Jersey is different than qualifying for Social Security. If you qualify for unemployment but do not yet qualify for Social Security, you do not have to worry about a reduction in your unemployment benefits. In New Jersey you can qualify for unemployment if you have earned at least $6,200 or worked 20 of the past 52 weeks and earned at least $123 per week. Additionally, your job must be considered a "covered" job as determined by the State Unemployment Compensation Law. The New Jersey Unemployment Insurance Division can confirm for you whether your job is "covered" and whether you are susceptible to any reduction of your unemployment benefits.
Qualification for Social Security
Qualification for Social Security in New Jersey will not reduce your unemployment benefits. If you are in the position of needing unemployment payments to help pay your bills, it makes sense to see whether you also qualify for Social Security payments since the additional income may help your situation. Generally, you can qualify for Social Security if you have worked for 10 years, which the Social Security Administration refers to as "40 credits" since you receive one credit per quarter of work. You must also be at least 62 years of age to begin receiving any retirement benefits. The year of your birth determines the age at which you can receive full benefits, which are often reduced if you choose to receive benefits as early as age 62.