You lost your job. It happens to almost everyone. Sometimes the termination of employment comes suddenly, a shock because you didn’t see it coming. Other times, you read the writing on the wall and you stayed until the bitter end. Regardless, now that your primary source of income has disappeared, you now have a new full-time job: seeking employment. Until you find that new job, you still have bills to pay and a family to feed.

This article guides you on the journey between jobs.

A little history

Historically speaking, unemployment insurance is a recent development. Following the devastating stock market collapse of 1929 and the resulting economic catastrophe known as the Great Depression, the first federal unemployment insurance program began in 1935 as a temporary, ameliorative effort to tide unemployed workers through the hardship of having no income. In this vast social welfare experiment, the government intended payouts intended to be spent in workers’ communities, thereby stimulating local commercial activity and thus resulting in increased business and the corresponding need to hire more employees.

Every state and the territories of Alaska and Hawaii followed suit by 1937. According to Social Welfare Library, “Contributions equaled 2% of payroll for the first two years and continued until an employer’s reserves averaged $55 per employee; at which time the contribution rate then dropped to 1% until the reserve averaged $75 per employee. Then contributions terminated.”

At that time, unemployed workers had to fulfill basic requirements: two years of in-state residence within the state where the worker claimed unemployment, a previous 40 weeks of employment, and a maximum annual salary of $1,500. The original program lasted only 16 weeks, covered unemployed workers regardless of the reason for their termination from employment, and employers with eight or more employees were required to prove coverage.

Today, the reason for unemployment matters, coverage has expanded, and all employers with one or more employees must provide coverage. At the height of unemployment in 2008, the federal government extended unemployment benefits extended up to 73 weeks. Writing for IVN in 2014, Joshua Alvarez states, “There is bipartisan support to re-extend federal unemployment insurance, but congressional leaders are at odds as to how long to extend them and how to fund the extension. Last week, the Senate voted to open debate on a bill that would extend federal UI for 3 months. If passed, it would cost around $6 billion.”

Who pays?

Employers paid unemployment benefits as mandated by federal law and governed by state guidelines that determine who may receive the payout, how much, and for how long. What they pay are essentially unemployment insurance premiums. Every state in the USA post unemployment information on their websites. For the newly jobless who have unreliable or nonexistence internet access, many cities also have unemployment offices.

During an extended period of high unemployment such as the Great Recession that began in 2007—and which still continues in isolated parts of the country—federal and state government agencies may enact extended benefits funded through tax dollars. Emergency Unemployment Compensation and Extended Benefit programs are established to assist workers who exhaust their state unemployment insurance periods and remain unemployed.

Who qualifies?

Just because you’re unemployed does not mean you qualify for unemployment benefits. According to The Balance Careers, “In order to receive unemployment compensation, you must meet the unemployment eligibility requirements for wages earned or time worked during an established period of time. In addition, you must be determined to be unemployed through no fault of your own.”

In other words, if your employer goes out of business, eliminates your position, downsizes, or otherwise terminates your employment due to circumstances beyond your control, then you probably qualify for unemployment benefits. However, if your boss fires you for poor performance, insubordination, drug use or illegal activity, or another factor that places you at fault, then you can bet your claim for unemployment benefits will be denied.

Other bases for denial of benefits include quitting your job without good cause, leaving due to illness, marriage, or enrollment in school. If you’re involved in a labor dispute, don’t expect Department of Labor decision makers to look favorably upon your unemployment benefits claim.

Continuing payment of unemployment benefits usually requires that the claimant receiving payment be actively seeking suitable employment. States do track this to verify that the person receiving benefits lives up to his or her part of the bargain. For instance, Ohio’s unemployment claims website mandates that the claimant record a minimum number of applications or interviews. The claimant must enter the dates applications were submitted, the companies to which they were submitted, the position for which he or she applied, and the results of submission (e.g., interview, hired, etc.).

The Balance Careers notes that the definition for suitable employment differs from state to state and may concern parameters such as commuting distance, skills requirements, degree of risk, the applicant’s physical fitness, and more.

How much?

Again, the Balance Careers offers easily comprehended insight: “Regular unemployment benefits are paid for a maximum of 26 weeks, less in some states. In many states, the compensation will be half your earnings, up to a maximum amount. The maximum varies by location. Benefits are subject to federal income taxes and must be reported on your federal income tax return.” You must also have been employed for a minimum amount of time or have earned a minimum amount in wages to qualify.

That’s right, you will pay taxes on your unemployment benefits, which are considered taxable income. For those who live in states and municipalities with income taxes, those, too, will be deducted from benefit payments.

Calculating the amount you’ll receive is no easy task. Some states offer an online benefits calculator which helps to estimate the amount you could receive. Subject matter experts caution against using any benefit calculator not residing on your state’s government website. Third party calculators do exist, and many are scams that use the personal information entered to drain victims’ bank accounts. Just to be safe, never enter your personal information into a third-party site.

Upon approval of your claim—remember, it’s a claim because you’re getting an insurance payout—your benefits may come in a check, on a debit card, or by direct deposit to your bank account. Payments will last up to 26 weeks and may be paid on a weekly or biweekly basis, depending upon your state’s guidelines.

Contesting a denied claim

Unemployment benefits are not guaranteed in the event you become unemployed. The reason for your unemployment matters. Writing for NOLO, Lisa Guerin, J.D. explains the reasons for the denial of claim benefits and states that you may appeal that decision. Chron reports that misconduct and incompetence are the most common reason for denial of benefits.s

Each state has its own appeal process and statute of limitations. Experts advise filing appeals quickly because some appeal periods expire in as little as 10 days. According to Guerin, “Typically, if you request an appeal, a hearing will be scheduled. At the hearing, you will be able to present any evidence you have that your claim should have been granted. (The employer has the same right.)”

Should you have voluntarily left your job—generally a blanket reason for denial of unemployment benefits—states may revise their decision if you can prove that you left for a good cause, such as sexual harassment. The burden of proof to establish good cause rests upon the person making the appeal. Since appeals occur in a court setting, the claimant may bring witness testimony, documented evidence, and other support to justify a reversal of the decision to deny the claim.

If the judge or arbitrator rules against the appeal, some states offer a higher level of appeal.

You’ll likely need legal representation to interview witnesses, prepare cross-examination questions, and perform other tasks to present your case in the most convincing manner possible, so be prepared to incur legal expenses before embarking upon this path. What you must determine is whether the cost of legal representation is worth the amount you’ll receive in unemployment benefits.

Regardless of the final decision, maintain a record of seeking employment. Such documentation will stand you in good stead if the judge or arbitrator approves your appeal and your claim for unemployment benefits.

Final words

The USA’s Unemployment Insurance system currently covers 53 programs run by all 50 states, the District of Columbia, Puerto Rico, and the Virgin Islands. Although unemployment insurance is intended for one-time use as a stopgap measure enabling families to whether an in-between period from one breadwinner’s job to another, repeated use is not uncommon, especially for seasonal laborers or those who work in unstable jobs.

Although not bruited as such, unemployment insurance qualifies as an entitlement program. In other words, it’s social welfare, a handout to give workers a hand up.