Unemployment Insurance and You
Susan Aaron | Monster Learning Coach
Once you’ve qualified, you have to look for work and be ready and able to work. Each week, you’ll be asked to show you’re searching for work; otherwise you won’t receive your benefit for that week. If you were to catch walking pneumonia and couldn’t look for work, for example, you wouldn’t be able to collect a check.
As you look for work, you don’t have to take just any job. If you’re a bridge painter and someone offers you an accounting job, you can decline and still collect benefits in most states. State laws and your prior jobs determine whether a job is suitable for you.
In most states, your weekly benefit amount is based on your last job’s wages. If you’re a low-wage worker, your weekly benefit amount will be low, but the formula is progressive. Low-wage workers get the highest wage replacement rate, up to approximately 70 percent of their lost weekly wages. Average-wage workers get around 50 percent. High-wage workers will end up with less than 50 percent of their lost wages, because weekly benefit amounts are usually capped at amounts near what average-wage workers receive, Hobbie says.
You’ll get that benefit for a certain number of weeks, usually capped at 26 weeks. Those 26 weeks of benefits last for a year. So if you were eligible for 26 weeks and you first collect for 10 weeks, find a job and then get laid off again, you’d have 16 weeks of benefits left.
Uncle Sam Giveth and Taketh Away
It’s bad enough you don’t have a job and your new “paycheck” is much smaller than you’re used to, but what’s worse is that unemployment compensation is subject to federal and often state income tax. You can have a portion of your check withheld, if you ask for it. If you don’t, you might have an extra-large tax bill on April 15 of the following year, Hobbie points out.
Read the Fine Print
Remember that unemployment insurance is a state-run program, so the general advice we’re giving you is just that – advice about how unemployment insurance works in most places. To find out exactly what the rules are where you live, check with your state’s unemployment office.
This article was originally published on Monster.com.