Unemployment Insurance Benefits

The Federal Unemployment Tax Act (FUTA) was enacted by Congress as part of the Social Security Act of 1935, and was intended to meet the needs of workers unemployed as a result of the Great Depression. FUTA was designed to encourage states to enact unemployment insurance programs by creating a system of federal monetary incentives for doing so. Every state, the District of Columbia, Puerto Rico and the U.S. Virgin Islands have enacted unemployment insurance programs.

The federal government, the U.S. Department of Labor, Employment and Training Administration, sets broad guidelines for coverage. Individual states have broad discretion, within the parameters set by federal law, in how they raise contributions for the benefit, how the benefit is administered, eligibility and application procedures.

Unemployment insurance is a federal-state program jointly financed through both a federal and state payroll tax to employers.

The Federal Unemployment Tax Act (FUTA) authorizes the Internal Revenue Service (IRS) to collect an annual federal employer tax which is used to fund state workforce agencies. As originally established, the states pay the FUTA to the federal government.

FUTA covers the costs of administering the Unemployment Insurance and Job Service programs in all states. In addition, FUTA pays one-half of the cost of extended unemployment benefits, during periods of high unemployment, and provides for a fund from which states may borrow, if necessary, to pay benefits. All loans must be repaid with interest.

Unemployment Insurance (UI) is a weekly cash benefit for eligible individuals who become unemployed. The maximum period for receiving regular Unemployment Insurance benefits is 26 weeks.

To be eligible individuals must have employment earnings, be totally unemployed, be unemployed through no fault of their own, be available for work, and be a U.S. citizen, or immigrant entitled to work in the U.S. There are no asset or resource qualifications applicable UI claimants. Neither are there income qualifications. However, if an individual engages in work while in receipt of UI benefits, the number of days of work in a week will impact the beneficiary’s UI eligibility or benefit amount that week.

An initial UI claim can be filed in the first week an individual becomes unemployed. However, individuals can file up to 12 months after a job loss, as long as they continue to qualify. Individuals can file an UI claim either from the NYS Department of Labor’s website or by contacting the Telephone Claim Center.

Beneficiaries must certify weekly to collect their weekly UI benefits. The unemployment insurance program also requires a UI beneficiary remain an active participant in seeking reemployment.

SEAP is a program, at state option, designed to encourage and enable unemployed workers create their own jobs by starting their own small businesses. Qualified UI beneficiaries work full-time on starting their business instead of looking for wage and salary jobs. Beneficiaries receive the same weekly UI benefit amounts as regular UI benefits. NYS is one of 7 states which have enacted a SEAP program. See below, Additional Benefits, Self Employment Assistance Program.

Unemployment Insurance law makes it possible for an individual to receive UI benefits while attending an approved training course or program. While participating in an approved training program, UI beneficiaries are excused from the requirement to look for work, in addition they may be eligible to receive benefits beyond the 26 weeks of regular UI benefits. See below, Additional Benefits, Training.

Dislocated workers are eligible for retraining and other services. See below, Additional Benefits, Dislocated Workers.

Trade Readjustment Allowances are income supports to UI beneficiaries who have exhausted Unemployment Insurance and whose jobs were affected by foreign imports. See below, Additional Benefits, Trade Readjustment Allowances.

Section 407 of the Disaster Relief Act of 1974 created a program for the payment of Unemployment Insurance to unemployed individuals whose unemployment is a direct result of a major disaster as declared by the President of the United States. Currently NYS is not implementing Disaster Unemployment Assistance. See below, Additional Benefits, Disaster Unemployment Assistance.

Emergency Unemployment Compensation (EUC) is a federal emergency extension of unemployment insurance that provides up to 53 additional weeks of unemployment benefits. See below, Additional Benefits, Emergency Unemployment Compensation.

Extended Unemployment Benefits provide unemployment compensation to workers who have exhausted regular state unemployment insurance benefits during periods of high unemployment. There are triggers (calculations are based on the state unemployment rate) that determine when a State will extend benefits. See below, Additional Benefits, Extended Unemployment Benefits.