Dear Harry: I am one of the unfortunate people headed for a layoff this fall. I am 63, and I will apply for Pennsylvania Unemployment Compensation benefits. I have not applied for my Social Security benefits because I wanted them to be as high as possible when I do retire. I also have a pretty solid amount in a 401(k) plan. I have looked hard at the Internet site for Pennsylvania, and I can't seem to get a straightforward answer to two questions. If I start getting SS benefits, will the state offset my SS against my unemployment benefits? If I take occasional withdrawals from the 401(k), will the state use these to offset the unemployment compensation? Help!

What Harry says: There is no offset provision for those on Social Security. You'll get the full unemployment comp. If you take funds from your 401(k) plan, there is a twisty situation. If the entire amount in the 401(k) was contributed by your employer, the unemployment comp will be reduced by the full amount received, prorated on a weekly basis for the annual amount. If you contributed to the 401(k), only 50 percent will be used to offset the unemployment comp (on a prorated weekly basis). I would suggest that the best procedure would be to use the unemployment comp alone if you can, and use regular savings for any supplemental amounts needed. If that won't do it, go for your SS next, and finally the amount from the 401(k).

Write Harry Gross c/o the Daily News, 400 N. Broad St., Philadelphia, PA 19130. Harry urges all his readers to give blood - contact the American Red Cross at 800-GIVE LIFE.