The first time I was laid off, I was 25. After graduating from college with a shiny new degree in journalism, I struggled to find a job and ended up doing two internships. As luck would have it, I found a job at a public relations agency right when my second internship was ending. When the 2008 recession hit, the news headlines were mostly background noise — until I was handed my layoff notice. It was devastating to be let go from a job I loved after working so hard to find a position in my field.
The experience was surreal, but I’d soon find out, not uncommon in my line of work. Public relations agencies rely on client revenue and when that income dries up, someone has to go. Many agencies operate on a last-in, first-out rule, so as the perpetual newbie, I was laid off two more times in the coming years.
Every time, I felt devastated and let down by the company. For me, getting laid off didn’t just mean losing my income, I also lost my work friends, part of my identity, and my sense of financial stability.
The positive side of my three layoffs is that I learned I can’t become financially complacent. It forced me to evaluate my spending, pay off all of my debt, and build a healthy emergency fund.
If you’re facing a layoff today, don’t despair. Know that there is a light at the end of the tunnel and you will make it through this.
In the meantime, here’s what you need to know about signing up for unemployment benefits.
How do you actually file for unemployment?
Before you file for unemployment benefits, you need to find out if you’re eligible to receive them. Each U.S. state and territory has its own guidelines about who is eligible and who isn’t. Under special circumstances, the list of workers eligible for benefits can change.
The best place to start is with your state’s unemployment office. The U.S. Department of Labor has a list of all labor services by state, including applying for unemployment benefits for each location.
Your state’s unemployment office will have information on the best way to file, which usually includes applying online. Unemployment claims take a while to process even in the best of times and can get even more stressed out during a down economic period.
Plan to have at least three to four weeks of savings on hand to pay bills before getting your first unemployment payment. This is where having an emergency fund can help you bridge the gap while you’re waiting for the money. Some states also have a one-week waiting period before you can receive benefits, so it’s always best to be prepared.
In my experience, filing works best if you’re organized and have all necessary information readily available. Here’s the information you will need to provide when filing for unemployment:
- Social Security number
- Name, address, and phone number
- Information from your most recent employer, including employment dates
- Some states require an ID such as a driver’s license
- Severance pay details
- If you’re legally authorized to work in the U.S. but not a citizen, you will need your Alien Registration Number
- Ex-military and federal employees may need to provide additional information
Some states will disqualify you from receiving unemployment benefits if you get severance pay while others don’t. It’s best to check with your state’s unemployment office.
What benefits do you receive?
Each state has its own calculations and rules for determining how much you can expect to get paid every week. Visit your state’s unemployment website for more information on how benefits are calculated.
The benefit range also varies from state to state, in part to account for cost-of-living differences. For example, Florida has a maximum benefit amount of $275 per week while the most you can receive weekly in New York is $504.
Unemployment is not meant to replace your entire paycheck. Benefits are designed to replace part of your earnings, depending on your income prior to filing. With the passage of the CARES Act, individuals are eligible to receive an extra $600 a week of unemployment on top of state benefits for up to four months (but that was a temporary change).
For some people, this could bring their unemployment benefits in line with their paycheck prior to getting laid off. Most states pay unemployment between 12 and 28 weeks, but the CARES Act offers up to 13 weeks of extended benefits.
How do you receive them?
Most states use either direct deposit to your bank account or a debit card to distribute unemployment benefits to recipients. Since it’s cheaper to send funds electronically, you will probably not get a paper check. Check with your state’s unemployment office on how you can expect to get your money.
When I received unemployment benefits, I had a debit card with a PIN I could use just like my bank debit card. You will need to activate your card once you receive it before using it for the first time.
The card can be used to withdraw cash at an ATM, pay for store purchases such as groceries, or pay bills. One thing I appreciate about having the debit card is that it looked just like any other debit or credit card so there was no way to tell it was for unemployment benefits.
The unemployment office of your state will deposit your benefits in the account according to a set schedule; mine was every two weeks. If the only way to get your unemployment is through a debit card, you may transfer the funds to your regular bank account. Check with your bank if that’s an option.
Do you have to do anything to keep getting benefits?
Most states have work search requirements in place for those receiving unemployment benefits. You will need to check with your local unemployment office for details on what information you need to provide to continue receiving your benefits.
In my case, I had to keep notes on all of my employment applications and search for work so I could report them. Every two weeks, I had to log into my account on the state unemployment office website and fill out a form detailing my work search before I could receive any benefits.
If you make some money during your unemployment, such as a side hustle or a part-time job, you will have to report your earnings on the application. This can reduce your unemployment benefits for the weeks in which you reported additional earnings.
Check with your local unemployment office on the work search requirements for collecting benefits. Since the goal of benefits is to only carry you through to your next job, you will need to show that you’re ready to accept work if a company extends you a job offer.
Pros and cons to filing
Filing for unemployment benefits has its pros and cons. It’s always good to step back and evaluate all the positives and negatives before moving forward.
- Financial help – When you lose your job, having any money coming in can be helpful. Even if you have a healthy emergency fund, the extra money coming from unemployment benefits can help you stretch your funds further.
- Time to find a job – Having money coming in every month means you can focus on finding the right job for your skills rather than taking the first offer that comes your way. You can take your time evaluating prospective positions, updating your resume, and applying for the right jobs.
- Free time – Even though finding and applying for a job will take some of your time, without a commute, you will probably have more free time. This means you can focus on getting healthier, work on your hobbies, and even learn a new skill.
- Side hustle limits – Many states require that you report the income you receive from any side hustles or part-time employment when receiving unemployment benefits. This would reduce the amount of benefits you receive.
- Claim limits – Most states limit how long you can receive unemployment benefits. Limits range between 12 and 28 weeks.
- Taxes – Unemployment benefits are taxed both on the state and federal levels. You can opt to have taxes taken out each paycheck or to pay them when you file your tax return.
- Risk of underemployment – Some states require that you consider jobs paying less than your previous position after you receive benefits for a certain number of weeks. This could mean taking a significant pay cut or accepting a job offer with a long commute.
- Less pay – Unemployment benefits are not designed to replace your paycheck. This means you will get a fraction of what you made while working full time.
It’s not easy, but it’s insurance you paid into
Losing your job can be difficult both emotionally and financially. Filing for unemployment benefits can help you stay afloat financially while you deal with the emotional rollercoaster of losing your job. It can also help you pay your bills and get in a better financial position.
Remember that while you’re working you’re paying into the unemployment system. Collecting isn’t charity, it’s insurance.
While unemployment benefits help, they are meant as a temporary measure and not a long-term solution. It’s important to have a healthy emergency fund in place with three to six months of living expenses to help you weather financial storms.
Have you ever filed for unemployment? What was your experience? Share your thoughts in the comments.
–By Veneta Lusk