House approves temporary reduction in Social Security offset for unemployment benefits

The Utah House of Representatives on Jan. 15, 2004 approved House Bill 8, changing how Social Security benefits affect unemployment insurance payments. The bill reduces the offset applied to unemployment benefits from 100% of Social Security to 50% for recipients who also receive Social Security, and the change includes a three-year sunset. The clerk announced the final vote as 56 yes and 18 no; the bill will be transmitted to the Senate.

Sponsor Representative Cox described HB 8 as an issue of fairness to older workers who collect Social Security yet still take jobs and later qualify for unemployment. “This, I believe, is an issue of fairness,” Cox said in summation. Supporters including Representative Morgan and Representative Moss said the 50% compromise addresses what they called discrimination against senior citizens and noted other states use a 50% or 0% offset.

Opponents questioned the actuarial treatment and the equity of treating Social Security differently from other pensions. A Representative who identified technical concerns asked whether the change had been modeled actuarially and whether employer premium rates would be affected; the sponsor and supporters said the state would use REED Act funds to cover the estimated cost during the three-year trial so there would be no immediate tax rate increase.

The bill contains a three-year sunset designed as a limited trial to assess impacts. The sponsor said the sunset and use of REED Act funds reflect a compromise intended to test the policy without increasing employer rates in the near term.

The House closed debate and approved HB 8. The bill will now be referred to the state Senate for further consideration.