One-third of double-dipping state retirees collect unemployment when they complete their temporary return to the workforce, state data shows.
Double-dipping, the practice of state government employees retiring to collect a pension and then returning to work part-time, is so commonplace there are rules about how much is allowable. A double-dipping employee can only work 95 days a year before stepping down, or risk a loss of pension payments. But because of a little-known loophole, since the employee is compelled by government regulation to quit, he or she is allowed to collect unemployment for having lost the double-dipped job.
State lawmakers defend the use of double-dipping retirees. But they have dubbed the exploitation of the unemployment compensation loophole “triple-dipping” and they are close to eliminating it.
Both the House and the Senate have approved bills that would end triple-dipping. If the House agrees to modifications in the Senate version of the bill, it will go to the governor.
Over a three-year period of 2010-12, the cost of triple-dipping unemployment claims was $2.77 million, according to data provided by staff in the office of state Sen. John Gordner of Columbia County.
A review of government data shows some of the worst offending is in the one place where they know best about loopholes in the unemployment compensation rules — the Department of Labor and Industry.
The issue of triple-dipping went largely unnoticed until Labor and Industry began bringing back hundreds of retirees to help deal with unemployment claims during the recession, said Dan Egan, a spokesman in the state Office of Administration.
In 2010, the Department of Labor and Industry’s double-dipping retirees accounted for 200 of the 600 retirees working for the state.
The Department of Public Welfare also employed about 200 double-dipping retirees, Egan said, and the remaining 200 double-dippers were spread across the rest of the state agencies.
The cost of triple-dipping unemployment payments in 2010 alone was $942,645.
Double-dipping is allowed because it gives state agencies the ability to bring back retirees to fill short-term needs in times of emergency, Egan said.
“It is meant to give agencies operational flexibility,” he said. “The unemployment compensation loophole is casting a negative light on the whole program.”
Egan said he is not sure why more double-dipping retirees don’t file for unemployment. It could be that many of them are unaware they can file a claim. Or it may be that some of them choose not to accept the benefit because they think it is inappropriate.
State Rep. C. Adam Harris of Juniata County said in a memo to other lawmakers that he was “astonished” to learn about the triple-dip loophole. He authored the bill that would close the loophole.
“We’ve made great strides in the past two years to reform our Unemployment Compensation system, and we must continue to ensure that the system is strong to provide benefits to those who truly qualify,” Gordner said.