Pension Rules

• California’s unemployment benefits statutes include pension provisions. Section 1255.3 allows an offset of unemployment compensation insurance benefits with non-contributory pension benefits collected during the same time. If you contributed to your IRA, you are exempt from the offset rules under 1255.3 (d)(1). If your IRA or pension payment increased or accrued as a result of work you performed in the 18 months prior to your unemployment, you must consider if the payment came from a base-period employer. The base-period employer is one of your employers included in the calculations for your employment benefits.
  
  

Exclusions

• If your base-period employer did not contribute to your IRA, you are not subject to offset. Even if a base-period employer contributed to your IRA, the contribution must have increased your pension or IRA or affected your ability to collect from it — an unlikely event for an IRA. If your IRA or pension is your personal contribution not based on your prior work, it is exempt from California pension rules for unemployment compensation offset.
  
  

More Rules

• If you made any contributions to your IRA, the pension-offset rules in California’s unemployment compensation law don’t apply. If you funded your own IRA, the rules for offset don’t apply. Lump sum payments are not deductible from unemployment compensation benefits in California, as the law only addresses periodic payments. California does not consider your IRA or pension benefits until you receive the funds. Once you report the income, the California Employment Development Department conducts a review. IRA withdrawals are exempt from offset under most circumstances and you can continue to receive your full unemployment compensation benefits.
  
  

Other Pensions

• If you collect periodic payments from a private employer pension fund or from a state or federal government pension fund, the payment is potentially deductible from California unemployment benefits. If you receive disability payments from military service, these aren’t deductible, although California deducts disability pensions from other state or federal government funds. Worker’s compensation payments and Supplemental Security Income aren’t deductible from the California unemployment compensation benefits. However, the unemployment compensation benefits are deductible from SSI payments so you can’t receive full benefits from both California unemployment and SSI concurrently.