What to Know About Unemployment Benefits

Unemployment benefits provide workers with a safety net in the event of mass layoffs or any other instance of job loss where the worker was not considered at fault.

Through unemployment insurance, recently unemployed individuals can receive financial assistance while searching for work, so long as unemployment requirements have been met.

Therefore, it is important to learn more about insurance benefits and eligibility before you apply.

You will need to file an unemployment claim on a weekly or biweekly basis—depending upon the state that you reside in—in order to receive compensation.

To receive compensation through unemployment insurance, you must continue to submit claims while eligible, even while your initial eligibility for the program is being determined.

Benefits are only available for a set amount of time within a benefit year, however, extensions are, at times, available during periods of high rates of unemployment.

What is unemployment insurance?

Federal state unemployment insurance provides benefits to individuals who are unemployed through no fault of their own and meet additional requirements, as determined by federal and state laws.

These benefits provide payments for a set period of time, or until the individual no longer meets eligibility requirements, whichever comes first.

Unemployment benefits and the length of time that benefits are available are largely dependent on the state in which an individual is receiving benefits.

This is because insurance is determined by state laws within established federal laws and guidelines.

Unemployment benefits are designed to provide unemployed individuals with temporary financial assistance.

Benefit amounts are based upon a percentage of the applicant’s total income over a recent 52-week period.

However, benefit amounts cannot exceed state maximums. Any benefits that are provided for unemployment will also be subject to federal income taxes and must be reported on your next federal income tax return.

Therefore, the program will also provide you with the option of having tax withheld from benefits by the state agency.

How are unemployment insurance qualifications determined?

Eligibility for unemployment compensation primarily revolves around the amount an individual has earned in wages over the last four or five completed calendar quarters as well as the reason that the individual is unemployed.

You may be eligible for unemployment insurance if you are unemployed through no fault of your own.

Typically, you may not quit your job and be considered eligible for assistance, except in extreme circumstances. However, state laws determine what is considered “at fault.”

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Each state also determines the minimum amount of wages that a worker must earn within the last four or five completed calendar quarters prior to the date that a benefits claim is filed.

This amount can drastically change from one state to the next, so it is important to review your own state laws requiring eligibility and wage minimums.

While unemployment compensation eligibility is primarily focused on previous earnings and the reason for your loss of employment, states are permitted to set additional eligibility requirements that it deems necessary for benefits.

How can you receive unemployment compensation?

In order to receive UI benefits, you will be required to submit weekly or biweekly (depending on the state) claims, even while you awaiting confirmation of your eligibility and benefit amount. Should you fail to submit a claim, you may lose benefits for that period of time.

In addition to submitting unemployment benefits weekly or biweekly claims, you must remain eligible for assistance.

Each state will have its own requirements for maintaining eligibility, but generally you will be required to make a reasonable effort to find work during this time, report to your local unemployment claims office when directed to do so and be able and willing to work.

There are also certain actions that may cease your eligibility for benefits, such as failing to accept a job that is offered, failing to provide proof of job searches and having too high of an income.

If you become disqualified for unemployment benefits or if your claim is later denied, you will have the right to appeal, should you choose to do so.

How long are unemployment benefits available?

Generally, UI benefits can be provided for a maximum of 26 weeks within a one year benefit period, so long as you remain eligible to receive benefits.

Due to these restrictions, you cannot receive benefits beyond that period, even if you become employed and then unemployed again, regardless of whether or not you meet eligibility requirements.

When are UI unemployment benefits extensions available?

Some states offer unemployment insurance extensions during periods of time where unemployment rates are exceptionally high. The basic extended benefits program can provide up to 13 additional weeks of benefits, if a beneficiary is eligible.

Additionally, some states have enacted volunteer programs that can provide up to an additional seven weeks of benefits.

During extended periods, you will still be required to continue to meet eligibility requirements and file weekly or biweekly claims, as determined by the state that you reside within.

Who pays for unemployment insurance?

In most states, unemployment insurance benefits are funded through taxes that are imposed on employers. In these states, employees never have to pay towards insurance benefits.

However, there are three states that require employees to make minimal contributions. In those states, there is an insurance portion of state taxes.

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