Bill held over would eliminate ‘Social Security offset’ that reduces unemployment payouts

Semi-retirement is the new retirement.

Out of economic necessity, many retirees take on part-time, or even full-time, jobs after they start taking their Social Security benefits.

But if those retirees lose their jobs through no fault of their own, state law requires their unemployment payments to be reduced by 50% of the amount they receive in Social Security benefits.

That’s wrong, says Rep. Jim Davnie (DFL-Mpls), who sponsors legislation that would repeal the “Social Security offset” in state law.

Rep. Jim Davnie

HF106, as amended, was held over Monday by the House Workforce and Business Development Finance and Policy Committee for possible omnibus bill inclusion. The companion, SF798, sponsored by Sen. Jason Rarick (R-Pine City), awaits action by the Senate Jobs and Economic Growth Finance and Policy Committee.

Minnesota is the last state in the nation with a Social Security offset, Davnie said, which unjustly penalizes people for whom “having a job after applying for Social Security is not something to keep them busy, it’s something to help pay the bills.”

“We don’t see this as double dipping,” said Mary Jo George, advocacy director for AARP Minnesota. She added current law is “particularly harsh for older, low-income workers.”

It’s unfair, George said, for workers who pay their full amount of unemployment taxes while working not to receive the full amount of the unemployment benefits “they were counting on to make ends meet.”

“Retirement is not the same as it was 15 or 20 years ago,” said George. “People just don’t have the pensions or the savings that are supposed to last them for a lifetime.”