Straight Answers About Unemployment Compensation

I receive a wide variety of questions on my "Got a Career Question?" page, but no subject generates as many inquiries as unemployment compensation benefits.

I've pulled together the 20 most frequently asked questions. Use the information, and pass it along to your family and friends. They probably have the same concerns.

1. How can I learn about unemployment benefits in ____________ (fill in your state)?

The rules, amounts, and payment periods vary by state. This applies to state unemployment benefits and to Federal benefit extensions. That means the only definitive place you can get the right information for yourself is from the state agency that administers unemployment compensation, typically called the "Career One Stop" (the new name for what we age-50+ folks used to call the "unemployment office." Career One Stop Web sites have all the information you need, but they can be challenging to locate. You can call instead, but expect a wait. These offices have many customers. So be sure to do an additional Internet search for your specific topic and state name.

2. Can I collect unemployment compensation and Social Security retirement benefits at the same time?

Yes! This perhaps the single most-asked question I get. Please tell people about this very positive, and relatively new (since 2000) news. Sadly, there are exceptions: If you live in Illinois, Utah, Louisiana, or South Dakota (though South Dakota may soon change, when state funding becomes available), the four states that continue to offset unemployment by $0.50 for each $1 of Social Security—essentially resulting in no payment for most people.

3. Is unemployment compensation really welfare?

No! While you had your job, your employer paid state and federal unemployment premiums. If you lost your job through no fault of your own as defined by your state, you have a right to collect all the benefits available. For more on this, take a look at another article on unemployment compensation.

4. How much can I get in weekly benefits?

First, go back and read Question 1. It varies by state, and within your state, your weekly benefit is based on your earnings history and family status—some states add a fixed amount for each eligible child. Maximum benefits vary widely by state and can range from a bit over $200 to more than $450.

5. How do I apply for benefits?

You can apply in person (be ready to wait), by phone (be ready to wait), or online if available in your state (go online anytime, 24/7, and have an easier time of it).

6. When should I apply for benefits?

Apply as soon as you learn you are, or will be, unemployed. If you've applied too soon, you'll be told. The important point is this: Apply quickly!

7. If I quit, can I collect unemployment?

In general, no, you can't—unless you can verify that you were forced to resign.

8. I'm retiring; do I qualify for unemployment?

No again. The generally requirements for eligibility are: (1) You lost your job through no fault of your own (as determined by your state); (2) You're ready, willing, and able to work, and you're actively searching for a job. Some people think that because a spouse or partner is retiring and relocating (therefore can't continue in their job), they are eligible. Nope.

9. I've been self-employed and can't find any work and have no income. Do I qualify?

This answer is "no" again. As a self-employed person, you paid no unemployment taxes. Sorry.

10. I've worked at my current employer for three months; do I qualify?

Most states require 12 months of employment before you qualify (see Question 1 again). If you worked elsewhere before serving your most recent employer, you may have accumulated enough time and earnings to qualify.

11. I've been retired for a few years but have been searching for a job to pay the bills. Can I collect against an employer I had until three years ago?

Sorry, but again no. You have to have a recent work and earnings history.

12. I worked for 27 years at the same employer until three months ago, when I became disabled. Can I collect unemployment?

One of the fundamental requirements to qualify for unemployment is that you be able to work. If you are disabled or are receiving disability benefits, including Social Security Disability, you are very unlikely to qualify.

13. I live in New Jersey and worked in New York until I was laid off recently. From which state do I collect benefits?

You collect in the state that was your place of work. If you traveled often or you split your time between locations across state lines, the state should be your primary work location, or the state in which you were paid and had state or local taxes withheld. If you're still not certain, look at your last pay stub for the state address of your employer. That's where you apply.

14. How long can I collect the benefits?

Under normal economic circumstances, the standard unemployment compensation benefit period in all states is at least 26 weeks.  Three federally funded benefit extensions have lengthened this several times during the past twelve months and the maximum benefit period as of Nov. 8 is 93 weeks in states with unemployment rates below 8.5 percent and 99 weeks in states with a rate of 8.5 percent or higher. You can find out the benefit duration in your state by contacting your Career One Stop or referring to this state-by-state list.

15. My claim for benefits was denied. What can I do?

In every state you have a right to appeal the determination of eligibility. Remember, if you were fired for cause (as determined by your state), if you resigned without cause, and if you're not willing and able to accept employment, you don't have any real basis for appeal. If your appeal is denied, you can retain an unemployment attorney to bring legal action but this is rarely cost justified despite what advertisements for such services claim.

16. I'm receiving unemployment benefits and have a chance to work under the table. Is this OK?

You are legally obligated to report all earnings to the unemployment agency. Do this at your own risk; and it's a big risk. Even though you're not having taxes withheld, and there's only a remote chance the unemployment agency will discover this other income, this would be a major violation. You'd risk fines or worse. Weigh the risks with the benefits.

17. I received severance pay when I was laid off. How does this affect my unemployment benefits?

This is a complicated topic. A simple response is that while it depends on how it's paid (in a lump sum or in periodic payments), you can be ineligible for the period of time represented by the severance amount (e.g., three months pay = three months ineligibility). Take a close look at this article, contact your state's Career One Stop, and go ahead and file. The site gives you a determination.

18. I'm told I can collect unemployment benefits if I'm continuing my education to prepare for a new occupation or career. Can this be true?

The answer is a definite "maybe." If you qualify for a state-approved retraining program due to a major industrial dislocation, you might be able to do this. In general though, if you're going to school and not available to work, you don't qualify for benefits.

19. I'm no longer covered by my employer's health benefits and couldn't afford to continue paying for COBRA. Can I get health care benefits with my unemployment?

First, be aware that if you are laid off before Dec. 31, 2009, you may be eligible to continue your employer-sponsored health benefits under a special COBRA provision. That provision requires you to pay only 35 percent of the employer's total premium for up to nine months of coverage. This means you could actually pay less than when you were employed, and obviously, far less than the 100 percent required by existing COBRA rules. Based on your earnings history and family situation, you may also qualify for state-subsidized health benefits. Ask about these at your Career One Stop, even though you'll likely be told about it when you apply for unemployment benefits.

20. My work hours and pay have been cut. What can I do?

Depending on your earnings and the amount of pay you've lost, you may qualify for partial unemployment benefits. Check with your state agency.

My best wishes in your job search and in getting through these tough times.