Ultimate Guide To Unemployment Benefits

Though the U.S. is enjoying higher than usual employment numbers, many workers still find themselves unemployed.

You may have lost your job through no fault of your own, left because of harassment, decided you wanted to pursue other types of work, or simply wished to change careers.

Six million people annually find themselves unemployed and looking for new work, so if your job has ended, know you are not alone.

Luckily, under certain conditions and circumstances, the U.S. government subsidizes your job search temporarily. This helps ease the burden financially while you find a new job.

Unemployment benefits, often referred to as unemployment insurance, is not something you pay into as an employee. It is not something you draw from like a savings account when you lose your job.

Rather, it is a state-issued benefit your employer pays into throughout the year. Each state sets its own guidelines for qualifications and requirements to receive these benefits.

The following overview provides you with information concerning the basics of unemployment insurance.

In addition to this information, look up your state specific guidelines to obtain a comprehensive understanding before you apply.

What are unemployment benefits?

One of the requirements to receive unemployment benefits, regardless of the state you live in, is your job loss must have come through no fault of your own. In other words, you cannot simply decide to quit your job because of a disagreement.

If your job ended because your department was phased out, the company closed, or you were no longer skilled enough for the job, then you qualify for unemployment benefits in most states.

Unemployment benefits are temporary as they often only lasting four to six months. Its purpose is to give out of work individuals a chance to find a job while covering some of their monthly expenses.

Additional payments may be extended under certain circumstances, but this is a rare occurrence. Some states offer an extension of benefits for an additional 13 weeks.

Since you receive money from a fund paid into by your former employer, the money you receive from unemployment benefits is taxable. Keep this in mind because you must claim it on your tax returns.

At the first of the year you receive a 1099 form indicating how much money was disbursed through the program.

The amount you receive is based on several factors and is reduced in amount if you receive money from any of the following:

  • Compensation from railroad unemployment benefits.
  • Trade readjustment allowances.
  • Disability benefits.
  • Benefits from the 1978 Airline Deregulation Act.
  • Benefits from the 1974 Disaster Relief and Emergency Assistance Act.
  • Benefits paid from the Federal Unemployment Trust Fund.

Learn About Requirements for Unemployment Benefits

Not every worker is eligible for unemployment benefits. Each state maintains its own set of qualifications you must meet to qualify for unemployment insurance.

Most states generally follow the same requirements, varying them only in the weekly amount disbursed and the length of time you receive assistance.

One of the standard requirements is you must have worked for a certain amount of time and for a certain amount of money.

If you only worked six months for a fast food chain you may not qualify because you were not with the company long enough, nor did you make money enough to qualify.

The other requirement is your job loss came as a result of factors not instigated by you. In other words, your termination came about through no fault of your own. You must not have been cited for misconduct.

Conversely, workers terminated due to harassment, discrimination or as a result of whistle-blowing can receive unemployment compensation due to wrongful termination.

Most states want to know you are looking for work while receiving benefits. Each state maintains its own set of requirements pertaining to how they want you to report your job search activities.

Some require you to login to the state’s portal and supply the names and contact information for those you spoke or interviewed with, or where you submitted your applications.

Others simply provide a yes or no box for you to check when you request your payment.

Regardless of state, any appointments set for you to attend and any requirements you fail to meet results in denial of benefits.

How to Apply for Unemployment Benefits

The sooner you apply for unemployment benefits, the better. This is because it takes at least a week for your case to be reviewed, verified and loaded into the system. Then it takes up to three weeks before the benefits are made available to you.

You must file the claim in the state where you lost your job, through an online portal for your state’s unemployment insurance program.

All states operate one, and nearly all have gone exclusively to online applications, though some do provide toll free numbers for assistance.

Before you apply, gather the necessary documentation. Most states require you to have the following:

  • Personal identification.
  • Contact information for employer.
  • Wages earned with employer (can use pay stubs or bank statements).

Some states require you to provide other documentation, which is listed on your state’s unemployment site.

If your application is denied, a letter is sent to you in the mail stating the reasons why it was rejected. Some of the most common reasons include not filling out the forms correctly, the employer contesting your right to claim benefits, or you did not work the required number of hours or make enough money to claim benefits.

If you believe the denial has been in error, the denial letter instructs you as to your options for appeals.

Find Out About Unemployment Programs

Unemployment benefits are not the only types of assistance available to you in most states. Consider obtaining additional help by extending your healthcare plan through the Consolidated Omnibus Budget Reconciliation Act (COBRA).

When terminated, you are given at least 60-90 days to determine if you want to continue your plan through this act. Understand your premiums may change and be higher than when you were employed.

Consider self-employment assistance, which is a program giving unemployed individuals a chance to start a small business. This is available to you if you live in New York, New Hampshire, Mississippi, Delaware or Oregon.

Similarly, if you feel you could find a better job if you received additional training, you may qualify for education assistance. Most states offer low cost training through career centers. You can learn more about career development resources here.