It is essential that workers receiving Unemployment Insurance (UI) payments understand how to cancel unemployment benefits when they find new employment.
Workers who continue to collect benefits after they become reemployed place themselves at risk of fraud charges and severe penalties. Failure to abide by state UI policies can also hinder workers’ access to benefits should they need them again in the future.
The exact rules on how to stop unemployment benefits when you get a job vary by state. Appropriate procedures can also differ depending on what kind of employment workers have secured.
Self-employment, part-time employment and full-time employment may each need to be handled differently, for example.
In most cases, workers can cancel an unemployment claim quickly and easily, regardless of the specifics of their situations.
In fact, some states do not require that workers formally cancel unemployment claims at all.
Workers who applied for benefits but were able to secure employment before their claims were processed should act immediately to cancel their unemployment claims.
Claimants will need to contact their UI office directly, typically by phone, to request that their claims be dropped.
If workers are unable to stop their unemployment benefits before payments are issued to them, they should not touch the monies they receive.
Those funds will need to be returned to the UI as soon as the appropriate authorities become aware that the worker is reemployed and can establish his or her options for repaying the unearned benefits.
In many states, UI recipients do not need to formally cancel unemployment at all. All UI recipients must submit information weekly or bi-weekly indicating that they have complied with program requirements and informing their states’ UI offices of any income they earned. This is referred to as “certifying” for benefits.
To cancel unemployment claims, workers must simply list the hours that they worked at their new job when certifying at the end of their first week of work.
The UI system will then register workers as having earned too much money to qualify to pursue the UI benefits process.
Alternatively, workers may elect not to certify for benefits at all once they begin working at their new jobs.
In either case, the UI system will suspend workers’ claims and cancel their unemployment benefits payments.
Suspended accounts can be reopened in the future if workers find themselves in need of assistance again later on.
Workers who prefer, may cancel unemployment benefits by directly informing their local UI offices of their new employment. In some cases, this may involve calling the primary contact numbers provided with their UI enrollment materials or listed on the offices’ websites.
Recipients may also be able to contact office staff using internal messaging functions in their states’ online unemployment benefits management systems.
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Some states, such as Texas, offer special “Tell Us You’re Hired” links on their UI websites that recipients can use to report their new employment and anticipated start dates. Workers will remain eligible for benefits until the week they begin working. No benefits will be paid after that point, regardless of when workers expect to actually be paid for that work.
Workers who find new employment that is not full time often wonder, “Can I collect unemployment if I work part time?” While specific situations may differ, the answer is generally “yes.”
Claimants who engage in part time work and earn less per week than they are entitled to in UI benefits do not need to cancel their unemployment.
They can continue to file claims, accurately reporting their earned income each week. Their UI benefits payments will be reduced by the amount of income they earned, but they can keep receiving payments until:
For instance, if a worker is entitled to $500 a week in benefits and finds part-time employment earning $300 per week, he or she does not need to stop collecting unemployment.
He or she can keep certifying for benefits, noting actual hours worked and income earned each time. Workers should understand benefits payments will be reduced using the state’s earned-income calculations.
Workers who continue to file for and receive benefits while working part-time generally must remain compliant with all program requirements.
This may include participating in training or submitting evidence of a minimum number of approved job search activities weekly.
Part-time employees collecting unemployment are often able to receive benefits for longer than they would have qualified to receive full benefits, because they do not reach their maximum benefit cap as quickly. In some cases, part-time income can enable workers to qualify for new unemployment claims when their initial benefits years run out because they have new earnings on which to base a subsequent claim.
Part time employees collecting unemployment need to familiarize themselves with UI reporting standards and take care to abide by them carefully to avoid overpayments.
For example, in many states, workers must report if they were scheduled for or offered shifts that they missed or chose not work. The potential income from those shifts must then be reported as if it were earned. UI benefits will be reduced accordingly.
Workers who elect to become self-employed or who take work as independent contractors automatically cancel their unemployment benefits because they cease to be eligible for assistance.
Disqualification is based upon the type of employment, and is not related to the profitability of the business or position.
Some states, however, allow for “sideline” work. Claimants do not have to stop unemployment benefits when they get a sideline job if:
Sideline earnings must be reported and applicants should understand UI benefits are reduced in the same ways and amounts that part-time employment would influence your benefit amounts under state regulations.
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