There are soooo many questions being asked about unemployment insurance right now, like,
“Do I qualify for unemployment benefits?” or “How much do I qualify for?” or “How do I apply for these benefits?”
Let’s start with the basics and work to the specifics of what is currently available under Coronavirus Pandemic 2020 CARES Act.
What is Unemployment Insurance?
Unemployment insurance, also called unemployment benefits, is a type of state-provided insurance that pays out when you lose your job and meet certain eligibility requirements. You will not receive unemployment benefits if you quit your job, are self-employed, or if you are fired for cause. The benefits are primarily paid out by state governments and funded by specific payroll taxes collected for that purpose.
However, three programs were established by the 2020 CARES Act which are designed to help out-of-work Americans, including those who ordinarily would be ineligible to access unemployment funds.
- Federal Pandemic Unemployment Compensation (FPUC), which provides an extra $600 weekly benefit through July 31, 2020, on top of regular unemployment insurance (UI)
- Pandemic Unemployment Assistance (PUA), which expands UI eligibility to self-employed workers, freelancers, independent contractors, and part-time workers
- Pandemic Emergency Unemployment Compensation (PEUC), which extends UI benefits for an extra 13 weeks after regular unemployment compensation benefits have been exhausted.
Most states recommend that you make an unemployment claim online during this time. To find out the rules in your state, check with your state’s unemployment insurance program.
Here are a few more details, especially for the self-employed.
What is the Pandemic Unemployment Assistance (PUA)?
Pandemic Unemployment Assistance (PUA) is a program that temporarily expands unemployment insurance (UI) eligibility to self-employed workers, freelancers, independent contractors, and part-time workers impacted by the coronavirus pandemic in 2020. PUA is one of the programs established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a $2 trillion coronavirus emergency stimulus package that President Trump signed into law on March 27, 2020. The Act expands states’ ability to provide unemployment insurance to many workers affected by COVID-19, including people who aren’t ordinarily eligible for unemployment benefits.
- Pandemic Unemployment Assistance (PUA), established by the CARES Act, temporarily expands unemployment insurance eligibility to self-employed workers, freelancers, independent contractors, and part-time workers.
- You must provide self-certification that you are able to work and available for work, and that you are unemployed, partially employed, or unable or unavailable to work due to a COVID-19-related situation.
- Benefit amounts are calculated based on previous earnings, using a formula from the Disaster Unemployment Assistance program under the Stafford Act.
- Those who are eligible for PUA can also receive $600 per week through July 31, 2020, under the Federal Pandemic Unemployment Compensation program.
- States may not be ready to process claims for freelancers, gig workers, and independent contractors for awhile, but workers will be eligible for retroactive benefits and can receive benefits for up to 39 weeks.
How Does PUA Work?
The Pandemic Unemployment Assistance (PUA) program runs from Jan. 27, 2020 through Dec. 31, 2020. It extends unemployment benefits to eligible self-employed workers, including:
- Freelancers and independent contractors
- Workers seeking part-time work
- Workers who don’t have a long-enough work history to qualify for state unemployment insurance benefits
- Workers who otherwise wouldn’t qualify for benefits under state or federal law
However, workers who can telework with pay are not eligible for PUA benefits. Also, workers must be authorized to work to be eligible for PUA, so undocumented workers will not qualify.
How Do You Apply For PUA Benefits?
The Pandemic Unemployment Assistance (PUA) program runs from Jan. 27, 2020 through Dec. 31, 2020. It extends unemployment benefits to eligible self-employed workers, including:
- Freelancers and independent contractors
- Workers seeking part-time work
- Workers who don’t have a long-enough work history to qualify for state unemployment insurance benefits
- Workers who otherwise wouldn’t qualify for benefits under state or federal law
However, workers who can telework with pay are not eligible for PUA benefits. Also, workers must be authorized to work to be eligible for PUA, so undocumented workers will not qualify.
Benefit amounts are calculated based on previous earnings, using a formula from the Disaster Unemployment Assistance program under the Stafford Act. PUA will have a minimum benefit that’s equal to 50% of the state’s average weekly UI benefit (about $190 per week).
Federal law allows considerable flexibility for states to amend their laws to provide unemployment insurance benefits in several COVID-19-related situations. States can, for instance, pay benefits when:
- An employer temporarily closes due to COVID-19, preventing employees from going to work
- A person is quarantined and anticipates going back to work after the quarantine is over
- A person stops working due to a risk of COVID-19 exposure or infection, to care for a family member, or to homeschool their children
Under federal law, an employee doesn’t have to quit to receive benefits due to COVID-19.
To find out the rules in your state, check with your state’s unemployment insurance program.