States set their own criteria for unemployment benefits eligibility. Most distinguish between retirement income, such as pensions, and Social Security benefits. With respect to pensions, many states reduce unemployment benefits by a dollar for every dollar the employer has contributed to the pension. As of 2011, 43 of 50 states never reduce unemployment benefits to Social Security recipients.
Illinois, Louisiana, Minnesota and Utah reduce unemployment benefits by 50 percent for claimants who receive Social Security payments. Minnesota waives the 50-percent reduction if the claimant earned wage credits for unemployment benefits eligibility while already qualified for Social Security payments. South Dakota and Virginia impose a 50-percent reduction for Social Security recipients, depending on the amount of money in the state unemployment fund. South Dakota, for example, ceases imposing a reduction if the unemployment trust fund balance at the end of a calendar quarter is $30 million or more.
Claimants of unemployment benefits are eligible only if they are able to work full time, actively seeking a permanent job and available to accept any suitable job offer. Claimants who are old enough to receive Social Security payments must make sure they vigorously pursue full-time employment. Their state might rule them ineligible if they are willing to work only certain hours or days, have no way of getting to work or have responsibilities or other circumstances that limit their time. They must be ready to present evidence of a job search, such as contacts they made, upon request by their state unemployment agency.
The effect of Social Security payments on unemployment benefits is different from the effect of Social Security Disability Insurance or Supplemental Security Income. In most states, any form of disability payments might disqualify a claimant for failing to meet the requirement to be able to take a full-time job. Some states allow claimants with disabilities to receive unemployment benefits as long as they do not turn down jobs that can accommodate their disabilities. These states are Alaska, Delaware, Hawaii, Idaho, North Dakota, Nevada, Massachusetts, Maryland, Tennessee and Vermont.