With Coronavirus induced lockdowns, closures and quarantines sweeping the globe, millions of people are suddenly trying to navigate the murky path of how to file for unemployment benefits. If this is you, you’re in good company.
Approximately 30 million people have filed for unemployment benefits since the Coronavirus lockdowns struck in March 2020. That is more than three times as many as the 8.7 million people who sought unemployment benefits during the entire Great Recession. Even when adjusting for population growth, the numbers are extremely concerning.
The record number of unemployment claims is due to companies having to shut down in the wake to the COVID-19 pandemic. If you’ve suddenly found yourself unemployed or furloughed, the entire process can be confusing and you might not know how to file for unemployment.
Here’s a deep dive into how to file for unemployment and other pertinent facts surrounding the benefits you should know about.
What Are Unemployment Benefits?
Unemployment benefits are compensation that unemployment insurance offers to those who have become jobless.
These benefits apply to workers who have lost their jobs due to no fault of their own. That can be due to layoffs, restructuring, retrenchment or any other reason.
The compensation that comes from unemployment benefits can be in two forms. Either as a direct deposit in your account or an unemployment check. It’s meant to provide part of the lost income for a particular period or until when you find another job.
The United States government manages the unemployment compensation program. Each state does collaborate with the federal government to run the program.
The funding to support the program comes in large part from the state. But, federal payroll taxes submitted by employers also play a part.
Coronavirus and Unemployment
On March 17th, 2020, the federal government announced a $2.2 trillion stimulus package. That was after a horrendous week that led to 3.3 million Americans filing for unemployment.
The law is called the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Its aim is to offer direct cash transfers for every eligible adult. Furthermore, the act also introduces the expansion of the existing unemployment benefits.
Specifically, the act gives every eligible adult up to $1,200. Additionally, there’s an extra $500 for every child under the age of 16 in the household.
The new legislation also created the Federal Pandemic Unemployment Compensation (FPUC) program. Through FPUC, workers who have been laid off and furloughed due to COVID-19 can get up to $600 more per week in federal unemployment benefits.
This “boost” in unemployment benefits will run through July 31st, 2020.
With the passing of the CARES Act, the mandatory wait period was also suspended. Successful applicants won’t have to wait for seven days before the funding kicks in.
The act also adds 13 more weeks to receive unemployment. That’s thanks to the Pandemic Emergency Unemployment Compensation (PEUC).
Another critical expansion of the benefits under the act is through the Pandemic Unemployment Assistance (PUA). Essentially, self-employed people don’t qualify for regular unemployment insurance (or any of its extensions) can also receive compensation.
That is especially critical due to a large number of independent contractors and self-employed workers who typically aren’t eligible for unemployment benefits.
How to File for Unemployment
Since each state manages its unemployment insurance program (in partnership with the federal government), you’ll need the specific details for your state.
Typically, you can apply for unemployment benefits through the state’s labor department. If there’s no such department in your state, then look up the relevant unemployment agency handling the benefits.
Make sure you apply in the state in which you work and not where you live if the two differ.
When making the application, you’ll need to submit information to the state for processing. That can include your employer’s address and the dates which you worked for them.
If your application goes through, then, your first compensation should come in within two to three weeks.
Due to the current COVID-19 pandemic, state agencies are handling a deluge of requests for unemployment benefits. Thus, you should make your application online if your state normally takes in applications through the phone.
Some states are also waiving the mandatory weekly job search report requirement in light of the current crisis. As such, you won’t need to fill in information every week on your job hunting efforts.
How Much Can You Expect to Get in Unemployment Benefits?
Since the goal of unemployment benefits is to replace the income you used to receive partially, the amount will depend on your former earnings.
Even though each state will use a different formula to arrive at the exact figure, all of them will take what you used to earn into account.
One common approach is to pay 50% of what you previously earned up to a capped amount that’s tied to the state’s average earnings.
The implication for those who used to earn higher wages is that though they will receive higher benefits, it’ll be less than what they used to take home. The issuing state determines the maximum amount a beneficiary can receive per week.
Another little known fact is that unemployment benefits are taxable.
You can, therefore, choose to have up to 10% of your benefits go towards paying your federal taxes.
But, what about applicants who are earning some other income and have applied for unemployment benefits? For example, you may pick up a temporary job for a day or two while being unemployed. As a rule, that other income will reduce the overall unemployment benefits you get.
Any such earnings you receive must be reported to the state’s unemployment agency.
How Long Do Unemployment Benefits Last?
Under normal economic conditions, most of the states offer unemployment compensation for 26 weeks. However, each state controls the period of pay, and as such, it can vary from as little as 12 weeks to as many as 30.
During crisis times, an extension can be given. That applies to the COVID-19 pandemic where many are jobless and others working from home.
In particular, due to the COVID-19 crisis, many states have extended the timeline for unemployment benefits by an extra 13 weeks.
Therefore, if you successfully apply for unemployment benefits, you could now receive compensation for a total of 39 weeks.
How to File for Unemployment in 2020
More people are out of work during the COVID-19 pandemic than there were in the entire Great Recession. If you now find yourself in need of unemployment compensation, the process can be intimidating.
As such, you need to seek out the right information on how to file for unemployment, including knowing where to apply for it in the state you work in.
Still have questions about how to file for unemployment? Ask your questions in the comments below.