NEW YORK (MainStreet) — For all the progress the economy has made since the recession ended, the job market only seems to be getting worse. The unemployment rate continues to hover around 9%, jobless claims have been on the rise for much of this year, and several reports show that more American companies – small businesses in particular – increased layoffs in June.
The unsteady job market has once again led many workers to question their job security. Nearly a quarter of those employed now fear there may be layoffs in the next six months, according to one survey by Glassdoor, the highest amount since the third quarter of 2009, right after the recession ended. Suddenly, those who managed to find work in the tough economy may be in danger of losing their positions at a time when the recession is supposed to be a thing of the past.
With the prospect of a double-dip job market looming for many American workers, a unique issue comes up: Can you collect unemployment again if you’ve already collected it for a previous job loss, and how long must you wait to claim benefits again?
In general, the answer is that workers can collect benefits after suffering multiple layoffs in a fairly short period, but how much and how long one can collect for varies significantly by state and by individual earnings.
When a worker applies for unemployment insurance after losing a job the first time, what he or she is really applying for is a certain number of weeks’ worth of benefits during the 52-week period following the first unemployment claim – what the Department of Labor refers to as their first “benefit year.”
Until recently, the maximum an American might be approved for is 26 weeks of payments during this benefit year, depending on how long the person had been employed before the unemployment claim. But during the recession, the government approved several extensions on the time one could collect to help the long-term unemployed (more on this later).
Put simply, then, if you have been approved for 26 weeks of benefits, the government gives you a full year to use them up, whether it’s for 26 consecutive weeks or it’s spread out over 12 months. Once you’ve used up those 26 payments, you must reapply to get more benefits.
Ordinarily, once workers have been approved for benefits, they either collect until they find steady employment or exhaust their allotted amount and must move on to other forms of government assistance. Since the recession ended, though, many workers have managed to find only temporary or unstable full-time work.
“In normal times, people generally are laid off for a short period of time, then go back to work and do not get laid off again in close proximity,” says Rebecca Dixon, a policy analyst for the National Employment Law Project who specializes in unemployment insurance. “But these are not normal times.”
Workers facing this situation fall into two groups: the ones who were laid off again within 52 weeks of when they first filed for unemployment, and those who were laid off for the second time after this period passed, in a new benefit year.
For those in the first category, the situation is pretty clear-cut: According to Dixon, as long as you are within the 52-week timeframe of when you first filed for unemployment, you can resume collecting any of your remaining benefits without having to reapply for unemployment insurance. For example, if you originally qualified for 26 weeks of benefits, collected 10 weeks’ worth before finding employment, then were laid off again a few months later, you are automatically entitled to continue collecting benefits at the same rate as before for the remaining 16 weeks or until the 52-week period ends, whichever comes first. Then you must reapply.
If, on the other hand, you lose your job again within a year of your first unemployment application, it falls in a new benefit year and you must go through the process of reapplying for benefits.
Here the situation becomes a bit more complicated.
The requirements for a second year of benefits vary significantly from state to state, but as Dixon points out, it’s generally easier to qualify for the second year than the first.
The first year a person applies for unemployment insurance, states review his or her earnings during the previous five fiscal quarters. Most states require workers to have spent one fiscal quarter earning at least 40 times the amount of the weekly unemployment benefits they’ll get, and often to have had paid employment for two additional quarters out of the previous five.
Of course, if you’ve already been collecting unemployment for the better part of the year already, it’s unlikely you will be able to meet those requirements, which is why states apply a different set of criteria for the second consecutive benefit year.
According to the Department of Labor, most states require workers to have earned at least three to 10 times the amount of their state’s minimum weekly unemployment payouts during the first benefit year to qualify for at least one week of payments in the second. (To put this in context, the minimum weekly payout in many states is less than $100 and in some, like Hawaii and Nevada, it's just $5 and $7, respectively, so three to 10 times that amount isn't very much.) However, a handful of other states do require a blanket earnings amount. In New Hampshire, one must have earned at least $700 during the previous year to qualify for unemployment benefits again, while in Colorado, one needs to have made at least $2,000 to do so. In this way, the government weeds out those who might otherwise try to collect unemployment indefinitely without ever working, while continuing to provide some safety net for those who make a reasonable effort to stay employed.
Even if a worker qualifies for a second year, though, Dixon says the amount paid out tends to be less than the first time around, since that employee likely had fewer earnings to base the benefits on. Likewise, the allotted weeks one can collect for tend to be less than during the first benefit year. (Though some states such as Connecticut, Illinois and Hawaii offer 26 weeks of benefits by default, but have stricter requirements to qualify.) So someone who might have received $300 each week for 26 weeks one year might get a fraction of that for just five to 10 weeks the next year, unless they landed a well-paid job and were employed for the better part of the year.
There is one other outcome unique to those who first lost their job during the peak of the recession and qualified for an unemployment extension beyond the original 26 weeks. In total, there are four different tiers of extensions that one could qualify for, providing a maximum of 99 weeks’ worth of unemployment benefits.
Anyone who had already qualified for a tier of employment extension (which range from six weeks to 20 weeks) before finding work would be able to resume collecting it upon losing their job in the same benefit year. If it was a different benefit year, however, states would have the option to either let the worker collect the remaining funds before having to apply for new benefits, or alternatively to provide the leftover funds after he or she had exhausted the new benefits.
In either case, though, the worker would be entitled to collect what’s left of their extension, for the same reason that guides the entire unemployment benefit collection process.
“We don’t want people to turn down job offers,” Dixon said. “So the unemployment system is designed not to discourage people from taking temporary or short-term work.”
—For a comprehensive credit report, visit the BankingMyWay.com Credit Center.