Financial Intel Monthly

Unemployment Compensation

Mar 19, 2020 7:53:00 AM / by The Retirement Group (800) 900-5867

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What is unemployment compensation?

Unemployment compensation (also called unemployment insurance) is a federal-state system of benefits that pays workers who are involuntarily unemployed a portion of their wages until they are able to find another job.

How is unemployment compensation funded?

Unemployment compensation is financed by employer contributions through a payroll tax in most states. Employees may also be required to contribute.

Who is eligible for unemployment compensation benefits?

You are an insured wage earner

You may be eligible for unemployment benefits if you are an insured wage earner. Almost all wage earners are insured because they have worked in a job covered by state laws.

Your state employment agency will also administer benefits payable to veterans with recent Armed Forces experience, former civilian federal employees, and individuals who lose their jobs due to the nation's trade policies or natural disasters.

You have a certain amount of covered earnings

Usually, you must have worked for a certain amount of time or had a certain amount of covered earnings for a year prior to the time you claim benefits. This varies--check your state's laws.

You are able to work

You won't be able to receive unemployment compensation if you are disabled or unable to work. You must be available to work and willing to take a job if offered. Some states, however, pay benefits to workers who become sick after they file an unemployment claim.

You involuntarily lose your job

Unemployment compensation was designed to protect workers who were laid off from their jobs until they could find new jobs or go back to work at the same job. However, unemployment benefits are also paid to workers who were fired as long as they weren't fired for misconduct connected with their job. You generally won't receive unemployment benefits if you:

  • Quit your job voluntarily without good cause
  • Refuse to look for another job or accept a suitable job offer
  • No longer work because of a labor dispute in which you participate
  • Are disqualified for other causes, as defined by your state's laws

If you are disqualified, your benefits may be postponed and/or reduced instead of being completely denied.

You are at least partially unemployed

If you lose your job, you may be entitled to benefits until you begin working again. Usually, there is a benefit waiting period after you file your claim and before you can begin receiving benefits. This period is short in most states--only about a week. If you are only partially unemployed, you may be entitled to receive partial benefits.

How much will you receive from unemployment compensation?

No matter where you live in the United States, you will receive a weekly benefit from unemployment compensation based on how long you were employed and your prior wages. However, each state, as well as the District of Columbia, Puerto Rico, and the Virgin Islands, administers its own unemployment compensation program, and state laws govern the amount of your weekly benefit.

Length of benefit period

In most states, you can receive benefits for 26 weeks. However, federal laws and some state laws provide for additional benefits to be paid to workers who exhaust their regular benefits during periods of high unemployment. These additional benefits may be paid up to 14 weeks (20 weeks in some states) and are funded partly by state governments and partly by the federal government.

Applying for unemployment compensation benefits

Where to apply

You should contact your state's public employment office for specific information on where and how to apply as soon as possible after you become unemployed. Your state office is in charge of handling your claim, determining your eligibility for benefits, and paying you a weekly benefit. You can file for benefits at the public employment office in the state in which you reside, even if you were employed in a different state. See Questions & Answers below.

How to apply

When you apply you will be asked to provide information about your former employer, your salary, and yourself. Your former employer will be sent a written statement that he or she must return to verify the information you have given. This may take some time.

Receiving benefits

After your claim is approved, you will begin receiving weekly benefits. Your state office will require that you report periodically to verify that you are actually looking for work. The employment office is also responsible for referring you to possible job openings.

Tax considerations

Unemployment compensation benefits payable through state unemployment offices must be reported as income. For further information, check with your tax advisor.

Questions & Answers

Where should you file an unemployment claim if you were laid off in one state but then moved to another?

File the claim in your new state of residence and register for a job there. The state office will forward your claim application to your previous state of residence or will give you information about the state unemployment office there so that you can file directly with that state. Any benefits owed to you based on wages that you earned in your previous state of residence will be sent to you from that state, even though you now live in another state.

 

This material was prepared by Broadridge Investor Communication Solutions, Inc., and does not necessarily represent the views of The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.

The Retirement Group is not affiliated with nor endorsed by fidelity.com, netbenefits.fidelity.com, hewitt.com, resources.hewitt.com, access.att.com, ING Retirement, AT&T, Qwest, Chevron, Hughes, Northrop Grumman, Raytheon, ExxonMobil, Glaxosmithkline, Merck, Pfizer, Verizon, Bank of America, Alcatel-Lucent or by your employer. We are an independent financial advisory group that specializes in transition planning and lump sum distribution. Please call our office at 800-900-5867 if you have additional questions or need help in the retirement planning process.

The Retirement Group is a Registered Investment Advisor not affiliated with FSC Securities and may be reached at www.theretirementgroup.com.

 

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