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PERSONAL FINANCE

Unemployment and Other Assistance Programs

Written by Kevin Smith

Building your personal finances from the ground up is something most of us face.  You may
already have faced times when you had very little or no income, and you were just trying to get
to a point where you felt like you didn’t have to worry about paying your bills.  It can be a long
struggle, and the government recognizes that.  That’s why there are several public programs
specifically designed to help people get out of these situations.
In the real world, many people suffer for months simply because they do not know that help is
available. These programs exist for people who have lost their jobs and for people who have jobs
but still earn very little income.

Unemployment Insurance

Unemployment insurance is a program run between the state and federal governments. Every
state has an unemployment insurance program, but the rules regarding unemployment assistance
vary from state to state. 

Whenever you work for a company, that company pays unemployment insurance as part of the
cost of hiring you. The employer pays 100% of the cost, and this item will not appear on your
paycheck.

Unemployment insurance provides funds for people who have lost their jobs, as long as they can
show a clear effort to look for new work.

Eligibility

If you are responsible for supporting yourself and your household and have worked for at least 3
months in the last year, you will probably be eligible for some unemployment benefits if you
lose your job. Unemployment insurance is designed to fill a financial gap for individuals who are
between jobs.  It is not an income substitute for permanent assistance, so there are some strict
eligibility requirements.

Reason Leaving Work

Unemployment insurance is designed specifically to help people who were laid off. You get laid
off when your employer does not have enough money to keep paying you or does not have
enough work for you to perform.  This means you usually cannot claim unemployment benefits
if you voluntarily quit your job.

Sometimes the line between getting laid off and fired can be a bit blurry too.  The general rule is
that if you get fired from your job due to misconduct (i.e. deliberately hurting the company, or
breaking ethics codes), you are not eligible for unemployment benefits. However, if you get fired
simply because you were not good at your job and your employer wanted to replace you, chances
are you can still receive unemployment benefits.

Number of Weeks

Under normal circumstances, you can claim unemployment benefits for up to 26 weeks. During
economic recessions, the 26-week limit could be lengthened. There is also a cap based on how
long you’ve been working.  If you were only working for a short time before you were laid off,
you can only get unemployment benefits for as long as you were working.

Availability Requirement

To receive unemployment benefits, you must be able to work and must be actively looking for
work. If you get a reasonable job offer while on unemployment, you should take it, especially if
your benefits are getting ready to expire. Your local unemployment office will usually call you
every week to verify you are still looking for work.  Some states have you create an online
account and update weekly your job search efforts.

Legitimate Work

The job you were laid off from must have been a legitimate job, meaning it was a normal job
where you received regular paychecks and taxes were withheld and reported to the government. 
If you were paid in cash or your employer did not report that you were hired to the government,
then you will not be able to receive unemployment benefits. Remember, unemployment
insurance is insurance. Someone needs to pay the insurance premiums, so if your employer is not
doing that, you cannot collect any benefits.

Benefit Amount

When your unemployment claim has been approved, you will get a check each week, usually
between $200 – $400. Some states now use reloadable cards instead of checks to pay your
benefits.  This is a safer and easier method to use.  The amount of unemployment benefits you
receive is based on a few factors including
  How much you were earning before you were laid off
 If you have children or not
 Your state’s benefit cap

Any benefits you get from unemployment insurance is taxable, just like regular income. For all
tax purposes, your unemployment benefits act just like a paycheck from a job.

Part-Time Work

If you work part-time, you will not automatically lose unemployment benefits. However, your
benefits will be reduced by whatever you earn at your part-time job.

Applying for Benefits

The process of applying for benefits varies greatly by state, but it usually just requires an online
application. You can find some help by clicking here.

SNAP Food Assistance

The Supplemental Nutrition Assistance Program (SNAP) is a program designed to help low
income individuals and families pay for groceries.  It is formally known as the food stamp
program. 

Eligibility

The SNAP program is open to all Americans whose income is below a certain level.  The limit is
based on household income, not individual income.  This is important because the majority of
recipients utilizing the SNAP program are children. The income threshold increases in
proportion to the number of people in the household.

A single person living alone needs to earn less than $1000 to be eligible, but a family of 4 can
earn a bit over $2000 per month and still receive benefits.

There is also a work requirement for SNAP benefits.  Any able-bodied adults in the household
must work or be enrolled in a skills training program designed to help them find a job. If you are
not working and are not in a training program, there are programs that allow you to do volunteer
work for the state in order to be eligible for benefits.

Enrolling

The process to enroll for SNAP benefits is more difficult than collecting unemployment
insurance. Since SNAP is a state-based program, the process will be different from state to state. 
You will generally need to first apply online, and then complete an in-person interview so a case
worker can assess your situation. The case worker will determine if you are eligible and the
amount of benefits you will receive.

Collecting Benefits

If you are enrolled in the SNAP program, you will get an EBT Card.  The card works like a pre-
paid debit card at all participating grocery stores. There will be one EBT card issued per
household, and its balance will reset each month.

EBT cards are only accepted at grocery stores and not everything sold in the store is eligible to
be paid with SNAP benefits.  SNAP benefits can only be used for healthy foods, so junk foods
and some pre-made meals may not count.

Medicaid

Medicaid is the single largest provider of health insurance in the United States. It is designed to
provide medical coverage for low-income individuals and families.  There are about 72 million
people enrolled in Medicaid at any time. A subset of Medicaid called CHIP (Children’s Health
Insurance Program) is specifically for children.

Eligibility

Eligibility is based on household income. The income threshold differs by state and it usually
changes each year.  Children from low income will almost always be eligible for either Medicaid
for CHIP benefits.
Enrolling

You can enroll in Medicaid through  the Healthcare.gov website.  The website will also provide
assistance to help you determine the specific eligibility requirements for your state.

Housing Assistance – Section 8

If you are having trouble finding an affordable place to live, you can apply for housing assistance
through the “Section 8” program (named after Section 8 of the Housing Act of 1937).

Section 8 provides housing vouchers to help pay rent and utilities for low income individuals and
families. These vouchers can be used either at a “housing project,” a building built and designed
to accommodate low-income persons, or with any participating landlord who accepts Section 8
vouchers.

Eligibility

Eligibility is based on income, but unlike the other programs, it is based on the median income of
the area where you are living. If your family’s income is less than 30% of the average income in
your area, you are given priority. Some vouchers are available for families earning less than 50%
of the average, but these housing units typically have extremely long waiting lists, some as long
as 5 years.

Even if you are eligible for Section 8 housing, there are a limited number of vouchers available
each year. The government determines a budgeted amount for Section 8 assistance each year.
This means that even if you do qualify, you may need some luck to get a voucher.

Benefits

The voucher covers most of your rent and utilities, with two limitations. First, you pay 30% of
your net income to the landlord.  (This 30% is charged regardless of what your income is or what
the total cost of rent and utilities are). The voucher will then kick in and pay the remaining
amount, up to a cap.

The cap for benefits is based on the fair market value of housing in your area.  This means that
vouchers in New York City (where rent is considerably higher) will have much higher caps than
in Knoxville, Tennessee. Your cap increases depending on your household size, but there is a
maximum of $2000 per month.  Families with children have higher caps than single people
living alone,

If you are in a situation where your income is low, taking advantage of some or all of these
programs can go a long way in helping make ends meet.  And they will allow you to spend time
and effort focusing on improving your skills and increasing your income.

Pop Quiz

[qsm quiz=152]

Challenge Questions

1. What do you understand by Unemployment Assistance?

2. Do you think it is a good thing?
3. How can it help families?
4. Using any resources available to you, list 5 programs of assistance that are available for
unemployed and families in your area.

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