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An Overview of Unemployment Benefits

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Recently unemployed Americans have the opportunity to apply for unemployment insurance (UI) in the states where they previously worked. In some instances, UI is also referred to as unemployment compensation (UC). However, the two terms refer to the same program. Unemployment insurance benefits are funded through employers’ tax contributions, and claimants do not need to pay any fees when they apply for the program. In any case, applicants will need to prove that they lost their jobs due to external circumstances and that they are actively searching for new work in order to receive UC.

When applicants file an unemployment claim, their petitions stay active for a single calendar year. However, candidates are only permitted to receive UC for a predetermined amount of weeks during that claim period. Each state imposes its own limits regarding how many weeks enrollees may collect benefits. Usually, these UI enrollment maximums are 26 weeks. However, there are some states where petitioners may receive unemployment insurance coverage for different amounts of time. For example, North Carolina workers are only permitted to receive 12 weeks of benefits. On the other hand, employees in Massachusetts may receive UI coverage for up to 30 weeks.

What can I use unemployment insurance benefits for?

Petitioners who are able to successfully claim unemployment benefits are able to utilize these funds for a short period of time. While enrollees have specific time limits regarding how many weeks they may collect UI claim funds, beneficiaries have flexibility regarding how they may use their UC monies. When employees unexpectedly lose their jobs, they may not have any savings prepared to support themselves and their families during these professional transitions. However, enrollees who are claiming benefits for unemployment may use their UC funds to cover the costs of living for themselves and their dependents during this time. As a result, recipients generally use their unemployment insurance compensation to pay for groceries, utilities or rent while they are unemployed.

How much unemployment compensation can I receive?

Eligibility for unemployment is the first factor that determines whether or not applicants will receive funds. These specific qualifications for unemployment insurance are established on a state-by-state basis. Furthermore, some of these stipulations relate to claimants’ annual earnings. This is due to the fact that local governments determine the amount of funds enrollees may receive based on how much income they previously earned. As a result, applicants’ state departments will need access to the following information in order to determine how much UI compensation petitioners may collect:

  • Salaried wages and hourly earnings
  • Tips and commission
  • Pension and insurance benefits
  • Paid vacation, sick or personal days from previous jobs

When applicants file their UI claims, they will need to provide this information. Failing to accurately report their earnings may result in candidates being overpaid or underpaid. If the former occurs, enrollees will need to pay the state whatever the difference is between their earned amounts and their paid amounts. Furthermore, states require recipients to maintain their unemployment benefits claim to keep receiving compensation. This means that, for every week claimants receive UI, they must prove their earnings. Therefore, enrollees’ awarded amounts are subject to change depending on how much income they earned during a given seven-day period.