If you've lost your job, you may be eligible for unemployment compensation: benefits paid to those who are out of work through no fault of their own, until they can find new employment. Unemployment benefits are available through a program that's jointly run by the federal and state governments. Federal law determines the general outlines of the program; state laws set the rules on who's eligible for benefits, how much they receive, and so on.
Who Is Eligible for Unemployment Benefits?
Not everyone who is out of work is eligible for unemployment benefits. The unemployment compensation program is intended as a temporary benefit, to tide over those who are temporarily out of work until they find new jobs. Those who have stopped looking for work or are unable to work can't collect benefits, nor can those who haven't worked regularly before losing a job. Your eligibility also depends on why you are out of work: If you quit without good reason or you were fired for serious misconduct, for example, you won't be eligible. Here are the general eligibility rules; each state has its own definitions of these terms:
- You must be able, available, and actively seeking work; if you aren't looking for a job or able to accept one if offered, you won't get benefits.
- You must be out of work through no fault of your own.
- You must have worked a minimum number of hours, received a minimum amount of wages, or both (depending on state law) prior to becoming unemployed.
Of course, you must also apply for benefits and follow the procedural rules of your state (such as filing weekly claim forms or calling in each week to verify that you are still unemployed and searching for work).
Learn more about How Unemployment Benefits Work.
How Much Will You Receive?
Although each state uses its own formula to calculate benefits, all states use the applicant's prior earnings in their calculations. Because unemployment compensation is intended to partially replace your income, the amount you will receive depends on how much you used to earn. Most states use an applicant's earnings during the highest paid calendar quarter of the base period as a starting point (in most states, the base period is the earliest four of the last five complete calendar quarters the employee worked before becoming unemployed). Some states use the two highest paid quarters of the base period; others look at the applicant's prior annual earnings.
Once this amount is calculated, the state then uses a multiplier, based on what percentage of wages it replaces, to come up with a weekly benefit amount. For example, a state that uses the applicant's highest paid quarter (13 weeks) and replaces half of the applicant's wages would multiple the total earnings in the highest paid quarter by 1/26 to come up with a weekly benefit amount.
This isn't the last step in the process, however: Every state also has minimum and maximum benefit amounts. No matter how much you used to earn, you can't collect more than the maximum weekly amount. Some states also pay a bit more per week to applicants with dependents.
Learn more on How Long Unemployment Benefits Last.
Putting It All Together
To find out roughly how much you will receive in benefits, you'll need to know what formula your state uses, as well as its minimum and maximum amounts and any dependent allowance it might offer. You can get this information from your state's unemployment insurance agency; most states make it available online. (For links to every state's unemployment insurance agency, see State Unemployment Agencies.) You'll also need to know your earnings for the period the state uses in its calculations.
Here are a couple of examples so you can see how it works:
California replaces half of an applicant's income, uses the highest paid quarter of the base period, and offers a maximum benefit of $450. If you earned $15,000 in your highest paid quarter, you would divide that by 26 to come up with half of your weekly wages: $576.92. That amount is more than the maximum benefit, so you would be eligible to receive $450 each week in benefits. California doesn't provide any extra amount for dependents.
Illinois replaces 47% of an applicant's income and uses the two highest paid quarters of the base period. If you earned a total of $20,000 in those two quarters, you would multiply that amount by .47, then divide it by 26 to come up with a weekly amount: $361.54. The current maximum benefit in Illinois is $385, so you would be entitled to collect the full $361.54. Illinois provides additional benefits to those who have a dependent spouse or child, so you would add these benefits to your weekly total if you were eligible.
As you can see, there's a bit of math involved in calculating your benefit amount. Thankfully, many states include your weekly benefit amount in your eligibility notice. If not, however, or if you want to figure out how much you will get before receiving the notice, it only takes a little research on your state's guidelines and a little math to come up with a number.