Unemployment Insurance | Purpose and Who is Eligible

What is Unemployment Insurance?

Unemployment insurance is an insurance benefits that American society has with itself. By receiving an income during periods of unemployment, recipients can afford basic necessities until they can again be productively employed. UI is a type of insurance that pays money to unemployed individuals on a weekly or monthly basis, if they are out of work under certain circumstances.

The UI differs from other welfare type programs in that it is not based on economic need, but upon employment history and the circumstances surrounding the worker’s separation from their previous employment. People that have been in the workforce for longer periods of time are generally able to receive benefits for more weeks. Since UI is a form of replacement income, the dollar value of benefits a person can receive is tied to the wages they received while working.

How do I file for Unemployment insurance?

To receive unemployment insurance benefits, you need to file a claim with the unemployment insurance program in the state where you worked. Depending on the state, claim can be filled in person or online.
The guidelines below explain the procedure to apply for unemployment insurance:

  • You should contact your state’s unemployment insurance program as soon as possible after becoming unemployed.
  • Then you should file your claim with the state where you worked. If you worked in a state other than where you live or if you worked in multiple states, the state unemployment insurance agency where you now live can provide information about how to file your claim with other states.
  • When you file a claim, you will be asked some certain information, such as your address and dates of your former employment. To make sure your claim is not delayed, be sure to give complete and valid information.

NB: Processing takes two or three weeks after you file your claim to receive your first benefit check.

Who is eligible for Unemployment Insurance?

To be eligible for this type of insurance, certain conditions were being put to place, for this program the following requirement must be meet:

  1. Unemployment through no fault of your own.
  2. Worked during a specified period, usually up to 18 months
  3. Earned a minimum amount of wages as determined by each state
  4. Actively seeking work each week you are collecting benefits.

Note: Each state may have specific requirement determined by state law to be eligibe.

Unemployment insurance Funds Source?

Funding for UI comes from two sources namely; separate state and federal UI taxes. Liable companies pay Unemployment insurance tax to their state government, creating a trust fund for the payment of future benefits.

These same companies pay a federal unemployment tax to the IRS each year. Annually, each state receives a grant of these federal taxes to fund the employees and UI services that their UI agency provides.

This dual funding mechanism mirrors the dual approach to administration that operates UI programs across the nation. Since the federal taxes pay for UI employees and services, the federal government sets out broad program requirements that the states must operate within as well as operating goals and targets that they must meet.

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