Feb 21, 2013

Understanding the Different Benefits of Unemployment Insurance Covers

This is the unemployed insurance system formed by federal state, which helps people who have lost their jobs by providing them some part of their wages when they are looking for job. The Unemployment Insurance program was formulated in the year 1935 in the form of social insurance. It is the contribution made to the system by the people who are working for an income support, in the unfortunate event that they lose their current job.

Temporary Federal Programs and Govt. Aid

Temporary federal programs, which are implemented at the time of recession, are funded fully by the federal government. Many states in U.S were literally affected during2007-2008 recession and these federal programs helped them to solve some of their problems. This system also helps consumers at the time of fall in economy and provides dollars for families to spend.

What is Unemployment Insurance?

Unemployment insurance is nothing but a temporary income, which comes to your aid when you suddenly lose your job, and don’t have any money to pay for your monthly bills. This type of insurance is given to deserving workers, who lose their job for no fault. To receive such benefits, you must be willing to work, ready to work, and able to work.

State Regulations Vary from State to State

In the state of New York, employers pay tax, which funds unemployment insurance. The amount is not deducted from their salary; instead they pay tax. If you qualify for the benefits, then the Department of Labor decides on this.

If you’re in Chicago, Texas, California or Vancouver, things may be different, because each state has its own set of laws in this regard.

To generalize, the eligible workers, who lose job for no fault of theirs, the Federal State provides this benefit through Unemployment Insurance Program. This means the individual should be eligible as per the state law and has to meet all other eligibility criteria. If you’re in Texas, you should seek help from a reputed Austin insurance agency in this regard.

Eligibility Criteria

1. The person should fulfill the criteria of the state law with respect to wages or duration of work during the established period of time, which is known as base period.

2. You should be unemployed for no faults of your own as per the state law and should meet all the requirements of federal law.

The purpose of Unemployment Insurance is to provide temporary financial support to workers who are eligible under the State Law.Every state offers different unemployment insurance program, which are with the guidelines of the state law The benefit amount, duration of benefit provided, and the eligibility criteria, which are available, are provided by the state law under which the claims can be established.

The amount of benefit provided through this program depends upon the funds contributed by the employers as tax. The employers are obliged to pay only a small amount towards this program.

Noteworthy Benefits

The benefits under this program depend upon the individual’s earning over the 52-week period up to the maximum amount, which is decided by the state. In most of the states, the benefit is paid maximum up to 26 months.The benefits may be extended for few weeks only in case of high unemployment or during tough financial times of recession, and uncertainty. There are states like Texas, which provide additional benefits for a specific purpose from separate state funded programs.

These benefits are subject to the law of federal income tax and should be reported to federal income tax. If you do not want to contribute to the funds of Unemployment Insurance agency, you can opt out of it, but it’s highly recommended to contribute regularly, to accumulate contingency funds for sudden job losses.

Hannah, a member of Unemployment Insurance Program, often writes about the benefits of unemployment insurance programs and government financial support programs, which have helped countless people during tough times of recession.

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