What laid off workers need to know about applying for unemployment


Fotostorm | E+ | Getty Images

The start of 2023 has seen a number of large companies announce deep cuts to their headcounts, including Amazon, Dell, Google, Microsoft, PayPal and Zoom.

Being laid off can be one of the most disruptive events in a person’s life, setting off a host of financial and existential questions.

Fortunately, the unemployment insurance program, established in 1935, helps many workers who’ve lost their jobs at least replace a share of their former paychecks in relatively short order.

More from Personal Finance:
64% of Americans are living paycheck to paycheck
What is a ‘rolling recession’ and how does it impact you?
Almost half of Americans think we’re already in a recession

“Individuals who rely on wages for income should apply soon after becoming unemployed,” said Doug Holmes, an unemployment insurance expert.

Here’s what newly unemployed workers need to know about the benefits.

Am I eligible?

Generally, to qualify for unemployment benefits, you have to have been laid off through no fault of your own, said Michele Evermore, a senior fellow at The Century Foundation. Maybe your company was downsizing, for example.

But it doesn’t hurt to apply even if you’re unsure if you qualify, Evermore said. Many people prematurely exclude themselves from the program.

“There’s a lot of mythology around who qualifies,” she said.

People may be surprised to learn, for example, that in some cases they can qualify for unemployment benefits even if they quit, Evermore explained.

For instance, in some states you’re eligible for the benefit if you made the choice to leave your job after your employer asked you to transfer to a location where your commute would be too long, or if you had to leave your job because your partner’s employment was relocated.

When can I apply?

In some states, it can take weeks for your claim to be approved, so the sooner you file the better, Evermore said.

While most states have a one-week waiting period before they can start paying you benefits, you don’t have to wait to request the relief, Evermore said.

Where do I apply?

Yahoo to lay off 20% of workforce, and News Corp. to cut 1,250 positions this year

What are the requirements of the program?

To receive and keep receiving unemployment benefits, you have to be able to work and actively be seeking new employment, Evermore said.

States have different ways of making sure you’re looking for work, she added. In some cases, you’ll be responsible for keeping a log of work search efforts on your own, and in other states, you’ll have to call in to the state unemployment office and share what jobs you’ve applied to on a regular basis.

“In some states you may also report work search online,” Evermore added.

When you apply for benefits, make sure you learn about how to fulfil any requirements in your state.

Are unemployment benefits taxable?

Prapass Pulsub | Moment | Getty Images

Yes, Evermore said. The benefits are subject to federal taxes and most states tax them, too.

When you start to get unemployment payments, your state will typically give you the option to have taxes withheld.

“I’d always take that option,” Evermore said. “You could be in for a long spell of unemployment and then get hit with a big tax bill.”

What is the typical weekly benefit?

In the third quarter of 2022, the average weekly unemployment benefit was around $385. But there’s a large range in the payments by state. For example, in Washington state, the benefit was nearly $600 during that period. In West Virginia, it was about $305.

There are other resources, too, for people struggling financially due to job loss, Evermore said.

“Unemployment insurance isn’t the only program in the world,” said Evermore, adding those who are out-of-work can also try applying for food stamps and other government assistance.

How long can I get the benefit?

Yellow Dog Productions | The Image Bank | Getty Images

I got benefits in the pandemic. Can I qualify again?

It’s possible, Evermore said.

Workers are typically eligible for unemployment benefits for a certain amount of weeks per benefit year. Depending on how long has passed since your last period of joblessness, and how many weeks you previously received the benefits, it’s possible you could qualify again after a follow-up job loss for at least some more weeks and possibly another full duration.

I received severance. Will that affect unemployment?

In most states, if your layoff included severance pay, your unemployment benefits will likely be reduced for the period in which you’re still receiving payments from your former employer.

But, again, that depends on your state. In some cases, your severance package will have no impact on your unemployment benefits, Evermore said.


Source link

Leave a Reply

Your email address will not be published. Required fields are marked *