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TheMastersNemesis

(10,602 posts)
Tue Apr 10, 2012, 06:41 AM Apr 2012

Unemployment Insurance (UI) System Benefits Calculation. Part II.

I realize most of what I am posting may be a bit dry. However most workers getting unemployment do not understand how benefits are calculated. Here is an overview.

Each state calculates (UI) unemployment insurance benefits based on a specific formula in keeping with federal mandates. Each state has its own maximum benefit amount. California will have a higher maximum benefit than Mississippi. It is based on the level of wages usually paid in that state over various occupations. Benefits are always a fraction of what weekly pay was for the claimant.
The amount of benefit is based on earnings and will usually mean 26 weeks of benefits. Some states like Michigan reduced the number of weeks to 20. During the Reagan years veterans were denied benefits if they left service and had not reenlisted because the GOP decided not reenlisting was a JOB QUIT. The GOP later relented and gave benefits, but vets only got 13 weeks of unemployment. That amount may still be true today.

In some cases there may not be enough earnings to qualify for 26 weeks. And benefit amounts are dependent on wages of all employers in the base period. A high wage and low wage job will usually effect benefits and make the weekly amount lower.
Thanks to the GOP unemployment insurance became taxable as income and recipients must pay federal taxes on benefits. Originally there were no taxes on unemployment insurance.

As far as I know the number of weeks of extended benefits you qualify for could vary based on your original number of weeks you qualify for. You local administrative authority can tell you the number of weeks qualified for.

There is a minimum earnings limit where a claimant will not qualify for benefits due to NOT enough earnings. Ultimately extended benefits are tied to the unemployment rate in each state. And Congress can reduce the number of weeks of extended benefits by federal statute which was recently done.

The GOP has an issue with benefits in that they want to make it harder to qualify and want to reduce weeks paid on a claim. They consider paying UI as a barrier to finding work.

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