Can I Get Unemployment when I Retire from the Military?

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Updated: 6/16/2021

Approximately 40,000 active-duty service members retire each year, and some of them are looking for jobs but haven't found work. It's possible that some of these retirees may be eligible for a special type of unemployment benefits, called UCX (Unemployment Compensation for Ex-Military), based upon the amount of their military retirement pay and the limits in the state in which they are filing. Most retirees will not qualify for UCX, but it's worth a look.

Are You Eligible?

It's important to remember that unemployment benefits vary from state to state -- just like military spouses can receive benefits due to a PCS in certain states. Only the unemployment office can determine whether your military retirement pay disqualifies you from unemployment benefits.

However, you can estimate by determining the maximum benefit amount in your state and comparing it to the amount of your military retirement pay. If your military retirement pay is close to or more than the amount of unemployment benefits for your state, you probably won't qualify.

According to the Defense Department Military Pay website, UCX has a few eligibility qualifications that retirees must meet. They are:

  • The retiree was on active duty with a branch of the U.S. military and may be entitled to benefits based on that service.
  • The separation must have been under honorable conditions.
  • There is no payroll deduction from your wages for unemployment insurance protection. Benefits are paid for by the various branches of the military.

The state may have additional requirements, including the most common one: You must be actively seeking employment.

You will file in the state in which you are physically living. This rule may be different from those for non-military-related unemployment compensation.

In cases where military retirement pay is delayed for some reason, you should be eligible for unemployment in the interim.

How To Apply

Applications for unemployment benefits go through your state unemployment office. You will need your Social Security card, your DD214 discharge form, a resume or job history and documentation of your retirement income (retiree account statement).

Should You Apply?

Applying for, and receiving, unemployment benefits has some downsides.

Generally speaking, you are required to physically remain in the state where you are receiving benefits -- no vacations, no visiting your parents or kids, no catching up with your old shipmate or battle buddy while you have a little free time. The idea is that you are actively looking for work, and you are going to have to prove that.

If you are offered a job, you may be required to accept it or lose your unemployment benefits. The details of this provision will vary by state.

There are Other Options

Unemployed retirees also may use their GI Bill benefits, which can provide some income for living expenses as well as help them become more employable.

The VA also has a program that was called Vocational Rehabilitation and Employment and now is the Veterans Readiness and Employment Program (VR&E). It is designed to help train veterans with a service-connected disability for a job. Changes in April 2021 made it so VR&E and the Post-9/11 GI Bill can be used to extend the amount of time veterans can pursue job skills or education.

Not every military retiree will qualify for unemployment benefits, based upon the amount of their military retirement pay and their state's unemployment compensation rules. However, it's worth investigating if you are out of work and money is tight.

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