A Look at Limits of Jobless Benefits

Unemployment compensation is the first, and sometimes the last, avenue of government help for the recently out of work. But consumers should not assume that it will tide them over until they get a new job.

Unemployment benefits are limited both in terms of how long they’re provided and how much they provide. They can replace a significant portion of a low-paid worker’s lost wages, but those with higher-paying positions often find they get only a small fraction of the income they were accustomed to earning.

In addition, unemployment compensation--financed by both federal and state governments--does not cover everyone. About 22% of the nation’s workers do not qualify for unemployment assistance either because their working wages were too low or they fall into a handful of excluded categories of workers such as certain farm workers, some domestics and most business owners.

Individual states, which administer the unemployment insurance programs, can also impose a number of restrictions on applicants, making it more difficult for individuals to qualify. As a result, in 1990 only 37% of the nation’s jobless were receiving unemployment benefits, according to government statistics. That compares to a peak of 81% of jobless workers receiving benefits in 1975.

The most common reasons for rejection include unwillingness or inability to work, being fired for misconduct on the job, leaving a job voluntarily or refusing suitable work. In addition, in most states you must have held a job for at least six months and earned at least a set amount during your tenure to receive benefits.

All it takes to apply for unemployment compensation is a notice that you’re about to lose your job. Social workers suggest that workers apply the moment they receive such notice, because it usually takes from three to five weeks for applications to be processed. The more applications there are, the more time it takes, added Norma Taylor, director of practice advancement at the National Assn. of Social Workers in Silver Springs, Md.

“It may take longer than usual now because the kind of unemployment we are seeing is overwhelming the system,” she said. “There are very large companies laying off huge numbers of workers and that bogs everything down.”

Generally, you must apply at a local employment office. After you fill out the appropriate paperwork, you will be assigned to a case worker, who will explain the process and attempt to find you suitable new employment.

Most offices have lists of available jobs. The bulk, however, are for blue-collar workers, Taylor said. White-collar workers generally have to search on their own.

How much you’ll receive in benefits will depend on how much you earned and where you live. Most states provide between 50% and 70% of the applicant’s average weekly working wages, up to certain limits.

The limits are relatively low, so those who earn substantially more than minimum wage are likely to find their unemployment benefits disappointing. The numbers change slightly every year, but the 1990 maximums--the most recent year for which national statistics are available--ranged from $140 weekly in South Dakota to $423 in Massachusetts. California’s top payment was $210, Illinois’ and New York’s were $270 and $260 respectively.

Most states pay benefits for up to 26 weeks. But Congress recently passed emergency legislation extending unemployment benefits for an additional 13 to 20 weeks because vast numbers of individuals remained out of work after traditional benefits were exhausted.

Because of this federal program, unemployment benefits can now last from 39 to 46 weeks, depending on the unemployment rate in the given state. Workers in only 10 economically depressed areas, including Alaska, Michigan, Connecticut, Maine, Massachusetts and New Jersey, currently qualify for the full 46 weeks of benefits.

During the time individuals receive unemployment benefits, they’re required to keep in contact with their case worker and continue to search for work. Those who turn down “suitable” jobs or fail to apply will be disqualified from receiving further benefits.

A banker generally won’t be asked to take a job at McDonald’s. But the longer people are on unemployment, the more likely they are to be pressured into accepting jobs they would otherwise consider beneath them.

Some social workers suggest that individuals carefully consider any and all job offers as they near the end of their unemployment compensation eligibility, regardless of the pay cut they might suffer. The reason is simple: After unemployment, there are few social programs available to those who aren’t disabled, elderly or indigent. It’s a big drop to the next government safety net.