State Rep. Adam Harris heard about it from a constituent. He was skeptical.
"My first reaction was let me look into this it can't be true," said Harris, a Republican who represents parts of Juniata and Mifflin counties.
After investigating, Harris discovered that so-call "triple dipping" is true. It is happening, and it is legal.
It goes like this: a worker retires and collects a pension and/or a lump sum payout. That worker returns to work temporarily, perhaps to help out an old boss or to train their replacements. Because they can't work more than 95 days without a pension penalty, that worker only works 95 days. On the 96th day, they file for unemployment - and get it.
It is a perfectly legal loophole in what many midstaters call an imperfect system.
"I disagree with it. It's wrong," said Sam Boutselis of Mechanicsburg. "They're doing well. I don't want to be too harsh here, but it's taking advantage of the system."
Jim Monteith of Annville agrees.
"I think it oughta be stopped right away," he said. "The state has been paying too much in retirements anyway and the people should be just damned happy to get it at one time rather than twice."
Officials at the state Department of Labor and Industry say they can't change the policy to stop triple dipping. It will take a law, they say, and Harris is trying to provide it. House Bill 2346 passed the Labor and Industry committee this week. Sources tell me it will soon be voted on by the full House.
The bill would eliminate triple dipping. It says if you end employment to preserve pension benefits, you are not entitled to unemployment benefits.
"Really these retirees, we have a lot of respect for the work they've done, but they are collecting a state pension, they are paid for the work that they come back and do," Harris said. "To have them then triple dip and take from the unemployment compensation fund we feel is a little unfair."
In 2011, 239 annuitants filed for unemployment, costing the system $1.1 million. Closing the loophole won't exactly create a windfall, but supporters of the bill say that for a fund that's sucking wind, any little bit helps.
"It's really not fair to continue to add to this debt," said Rep. Ron Miller, R-Hanover, Chairman of the Labor and Industry Committee. "We're borrowing money from the federal government to pay unemployment benefits. We owe $3.6 to $4 billion to the federal government."
Harris hopes his bill passes the House, heads to the Senate and then gets to the governor's desk quickly. He knows some annuitants who are getting unemployment benefits won't like it if the money stops, but he prefers to focus on taxpayers.
"We feel the agreement was you're gonna come back for a term less than 95 days," he said. "You know it's gonna end, we know it's gonna end, so closing this loophole takes the state out of the equation. They'll just be denied because it's against state law."