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How Unemployment Works

How Unemployment Works

Since the recession in 2008, many people have been laid off their jobs. Though the economy has mostly recovered since then, it is always better to be informed about benefits, such as unemployment, that may help us during such harsh times.
Medha Godbole
Many people all over the world suffered a crushing blow to their livelihood during the recent recession. The government sponsored unemployment benefits program helped a considerable amount of the unemployed population of US during this time.

The people who file for unemployment benefits are financially assisted by the Federal government or their respective state governments. It is basically a form of social welfare benefit. Following are the conditions set and the process followed for this program.

A person cannot just apply for this benefit because he has lost his job. There are a number of conditions which have to be fulfilled, before a person can claim his unemployment benefits.
  • The applicant has to be laid off, and not fired from his job.
  • The applicant has to be totally or partially unemployed.
  • The applicant has to be monetarily eligible.
  • The applicant must have an approvable job separation.
  • Finally, the applicant has to fulfill some requirements on a weekly basis. Some of those are: be able to work physically, actively look for work, and file a claim once a week, to get timely benefits.
The Federal Unemployment Tax Act (FUTA) has provided the IRS with the authority to collect the federal employer tax, for funding state work force agencies.

Application Process
A person can file for this program on his own, and submit it with the state machinery, via the state unemployment agency. Usually, it takes a couple of weeks for the applicant to get the unemployment benefits. An employer can also kick start the application process of unemployment benefits for his employees, whom he plans to lay off. As mentioned earlier, the individual who has been laid off, has to fulfill the requirements of searching for work and be completely capable of working. For some applicants, doing this on their own can be a bit of a hassle and a subject of confusion. In that case, assistance of an unemployment attorney may make the task much easier. Then the applicant can just fill the forms without having to worry about the legal technicalities, and continue his search for employment.

An employee who is laid off gets a specific amount of money, until he is able to acquire a dependable source of income. The money that he receives, first goes to the social security fund. It is then calculated as a proportion of the money that he used to earn when he was employed. Consequently, those who earned more when employed, receive more through the benefits. Health coverage is also a very important benefit along with the monetary compensation. The period for which a person can get this benefit is 26 weeks. In periods of recession, these benefits can be extended indefinitely.

Once the individual succeeds in finding employment, the compensation and health insurance benefits are stopped. This program has served as a very useful tool for many who have lost their jobs, and apart from that, this scheme also serves as a booster for the economy, as the unemployed don't lose their power to spend.