A Message from Penny Forward founder and CEO, Chris Peterson

Last week one of our members reached out to us because she found out that she is losing her job. This is a tough time for her, but she agreed to have us share these resources with you in case you’re ever in the same position.

One of the first steps to take when you find out you’re losing your job is looking into unemployment insurance (UI). UI is a temporary benefit that helps keep you on your feet financially while you’re searching for your next opportunity. Here’s what you need to know about applying, payments, and where to find more help.

1. When Should I Apply for Unemployment?

Let’s start with timing. You may wonder, “Should I apply now, when my job ends, or when my severance package ends?”

Good news: You don’t have to wait until your severance ends. Generally, the best time to apply is as soon as you’re officially unemployed – usually, that’s the day after your last working day. The unemployment office doesn’t require you to wait until your severance runs out, but you will need to report any severance payments or other compensation, which could temporarily affect your benefits. Every state’s rules are a bit different, so check with your state’s unemployment office for specific guidelines.

👉 For more on when to apply, check out your state’s website. Here’s a helpful list of state unemployment offices from CareerOneStop.

2. What Will I Get Paid from Unemployment?

Unemployment benefits aren’t a full replacement for your paycheck, but they’re meant to give you a safety net. Here’s how it works:

• Amount: Most states calculate your benefit amount based on your recent earnings, usually averaging around 40-50% of your previous wages. States also have a maximum benefit, which can vary widely. For example, in some states, the maximum weekly benefit is around $450, while others might offer over $900.
• Duration: Typically, you’ll receive benefits for up to 26 weeks, but during tough economic times, states or the federal government may extend benefits.

👉 Curious about specific numbers? The U.S. Department of Labor has a general guide, and your state’s unemployment website will give you the exact details for your area.

3. How Long Will I Have to Look for a New Job?

When you receive unemployment benefits, you’re expected to actively search for work. In most states, this means making a certain number of job contacts per week and being available to accept a suitable position if offered. The exact requirements vary by state, but the general idea is to stay proactive.

Pro tip: Many unemployment offices offer free resources to help you with your job search, like workshops, resume reviews, and online job boards. Signing up for these can be a great way to meet your job search requirements while making real progress toward landing your next gig.

👉 To learn about the specific job search requirements in your state, check your state’s unemployment website or browse CareerOneStop’s job search resources.

4. Who Can Help Me if I Have Questions or Need More Information?

Navigating the unemployment system can feel confusing at times, especially with paperwork and new rules to understand. But help is available!

• State Unemployment Offices: Start by calling your state’s unemployment office. They can guide you through the application process, explain your benefits, and answer questions about your eligibility.
• CareerOneStop: This resource, sponsored by the U.S. Department of Labor, offers a wealth of information on unemployment benefits, job search tips, and links to state-specific resources.
• Local Libraries and Job Centers: Many public libraries and local job centers also have staff trained to help people navigate unemployment and connect with job search resources. Plus, they often offer computers and internet access if you need them to apply.

👉 Check out CareerOneStop’s resources to get connected with support and find job search assistance near you.

5. Where Does the Money for Unemployment Benefits Come From?

Unemployment benefits aren’t just “free money.” They come from a system funded mainly by taxes paid by employers. When you were working, your employer paid a portion of your wages toward unemployment insurance. This system ensures that there’s a pool of funds available to help people when they face temporary job loss.

Some states also require small contributions from employees. During economic downturns, the federal government may chip in to provide additional funding, as we saw during the COVID-19 pandemic.

👉 If you want to dive deeper into how unemployment insurance is funded, the U.S. Department of Labor has an informative section about the program’s funding.

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6. What About Social Security Disability Insurance (SSDI) if I’m Blind or Disabled?

If you’re blind or have a disability that makes it challenging to find or hold a job, Social Security Disability Insurance (SSDI) might be an option if your unemployment benefits run out. SSDI is a federal program that provides monthly payments to people who have a qualifying disability and enough work credits through prior employment. SSDI could be a lifeline to help cover living expenses if you’re unable to return to work due to your condition.

Here’s what you need to know about SSDI and how it could help when unemployment benefits end:

• Eligibility: To qualify, you must have a medical condition that meets the Social Security Administration’s (SSA) strict definition of disability. The SSA defines disability as an inability to work due to a severe medical condition that is expected to last at least one year or result in death. If you are legally blind, you may also qualify with less restrictive work history requirements.
• Application Process: SSDI applications typically take time, and many applicants are initially denied. However, those who qualify receive retroactive payments for the time spent waiting once approved. To apply, you’ll need medical records, details of your work history, and other personal documentation. It’s helpful to apply as soon as possible if you think you qualify since the review process can be lengthy.
• How SSDI Works with Unemployment: SSDI can start once you meet the eligibility requirements, but remember that SSDI and unemployment benefits are different. SSDI is for people who are unable to work due to disability, while unemployment requires you to be actively looking for work. If you’re eligible for both, you’ll want to consult an expert on how to proceed, as receiving unemployment while applying for SSDI can sometimes lead to questions about your work readiness.
• Additional Work Incentives: The SSA offers work incentives and vocational programs for SSDI recipients who want to try returning to work. These programs allow you to explore part-time or trial work periods without immediately losing your benefits, offering a bridge if you’re considering returning to the workforce but need accommodations and time to adjust.

👉 For more information, visit the Social Security Administration’s page on SSDI. They also have an accessible PDF about SSDI for people who are blind, which explains unique provisions for those who qualify under this category.

Additional Tips and Resources for SSDI Applicants

• Consider Getting Help: The SSDI application process can be complex, and many applicants benefit from working with a disability advocate or attorney who specializes in SSDI claims. Many offer free consultations, and their fees are capped by law.
• Prepare for Appeals: If your application is initially denied, don’t give up. Many people are approved after an appeal or when additional medical evidence is provided.

👉 The Social Security Administration provides an overview of the application process and what to expect on their website.

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Losing a job and facing financial uncertainty can be overwhelming, but with the right steps and support, you can navigate this time more smoothly. Unemployment insurance is a crucial tool for your immediate needs, and if you’re facing a disability, SSDI can be a longer-term option when you need it. Remember to reach out for assistance and use the available resources to guide you through each step. You’re not alone, and there are programs designed to help people in your exact situation get through tough times.

Here are a few additional pointers:

• File with the unemployment office Weekly: Many states require you to file a weekly or biweekly claim to continue receiving benefits. Set reminders to keep up with this!
• Keep Records: Track your job search activities, communications with the unemployment office, and any forms or paperwork. It’ll make things easier if any questions come up.
• Stay Updated: Rules and benefits can sometimes change, so check in regularly with your state’s unemployment website or CareerOneStop to stay informed.

Remember, this is temporary. You’ll be back on your feet before you know it, and in the meantime, unemployment and SSDI benefits are here to help support you while you search for your next opportunity. Best of luck, and don’t hesitate to reach out to Penny Forward if you need more information! Drop us an email to pennyforward@pennyforward.com or call 1 (888) 332-5558.

Sincerely,

Chris Peterson, AFC®
Founder and CEO, Penny Forward