6 Assistance Options If You’re Unemployed
The Labor Department released its numbers last week, and it turns out employers reduced their payrolls by 80,000 jobs in March. This being the third straight month of decline, it’s getting harder and harder to pretend we’re not in a recession. Even though the overall unemployment rate remains low by historical standards, job seekers are finding out that landing a new job is noticeably harder than it’s been for the past couple of years.
When laid off, most people expect to bounce right back and find a new jobs within a couple of weeks. If the current economic climate is any indication, they might have to brace themselves for a slightly longer stint in the ranks of the unemployed.
Losing your job can be devastating. Utility bills have to be paid, credit card and/or loan payments will not wait for you, and living expenses still have to be met. At that point, it’s either you dip into your savings to keep you afloat while you look for work, or you get further into debt. There’s also the option of turning to family and friends for limited assistance. You still have other options, though. Here are 6 resources you can turn to:.
Unemployment Compensation
If you find yourself without a paycheck because you have been laid off from work, you may be eligible for Unemployment Compensation. The program’s main objective is to provide temporary and partial wage replacement to people who are out of work through no fault of their own. The U.S. Department of Labor oversees the system, but each State administers its own program.
States have developed diverse and complex methods for determining eligibility. In general there are three major factors: (1) the length of recent employment and amount of earnings; (2) demonstrated ability and willingness to seek and accept suitable employment; and (3) certain disqualifications related to your most recent job separation (most of the time, but not always, you’re not eligible if you’ve resigned your job) or job offer refusal (generally, you may not refuse an offer of, or referral to, “suitable work” without good cause).
The total maximum duration available nationwide is 39 weeks. The regular State programs usually provide up to 26 weeks, and the permanent Federal-State Extended Benefits Program provides up to 13 additional weeks in States where unemployment rates are relatively high.
In 1999, the national average weekly benefit amount was $215 and the average duration was 14.5 weeks, making the average total benefits $3,118. For a more current estimation, visit the Economic Policy Institute’s Weekly Benefit Amount Calculator.
To find out if you are eligible for unemployment compensation, visit your local one-stop career center. By using it, you can avoid dipping into your savings to cover your day-to-day expenses while job hunting.
Food Stamp Program
People who work, but whose earnings are modest, or people who are temporarily without a job, may be eligible for the Food Stamp Program. This program helps cover the cost of food for households with income less than 130% of the official poverty rate.
For example, a family of three with an income of $19,526 or less in 2002 and little money in savings, could qualify for food stamps. The value of the food stamps you receive depends on the number of people in your household, monthly total household income, and other living expenses, such as high housing costs or medical bills. For example, a family of three with no income would receive $356 a month in food stamps. The same family with $500 in monthly earnings (after taking out the cost of certain expenses) would receive $206 in food stamps.
Most households may have up to $2,000 in savings and still qualify. If your household has a person who is 60 or older or disabled, you may have up to $3,000 in savings. The savings of people who receive TANF or SSI do not count. Your home does not count. In some States, at least one car does not count. Food stamp benefits are not cash. They come on an electronic EBT card that you use like a bank card to buy food. Is it worth applying for food stamps, if say, you are eligible to receive only $50 a month? That modest amount of money can make a big difference over time.
To learn more about food stamps or to find the toll-free phone number for your state, call 1-800-221-5689. You can also visit www.foodstamps-step1.usda.gov
Housing Assistance
There are several state and federal programs to assist people who are having difficulty affording the high cost of housing, but availability is limited. People with very low income may qualify to live in federal public housing, or to use what are called Section 8 vouchers to help pay the rent in private housing. Both programs are set up so that your rent is not more than 30% of your monthly income, but sometimes people using Section 8 vouchers find themselves needing to pay more than this to rent a unit that is acceptable to them.
The number of rental units available through both programs is decreasing, causing waiting lists to get longer. Your state may also have its own programs to help people lower their housing expenses.
To see if you may qualify for a federal rental assistance program or to locate a housing counseling agency near you, call your local Housing Authority, or visit the U.S. Department of Housing and Urban Development web site at http://www.hud.gov/faqs/faqrenting.cfm or the web site for the National Low-income Housing Coalition at http://www.nlihc.org.
Health Care Coverage Options
If you have been laid off from work and you were receiving employer-provided health insurance, you can continue that insurance policy while you look for another job. This is referred to as COBRA coverage. This coverage, however, is only available when coverage is lost due to certain specific events. Group health coverage for COBRA participants is usually more expensive than health coverage for active employees, since usually the employer pays a part of the premium for active employees while COBRA participants generally pay the entire premium themselves. It is ordinarily less expensive, though, than individual health coverage. For more information, visit the U.S. Department of Labor’s web site at http://www.dol.gov/ebsa/pdf/cobra99.pdf.
If you cannot afford COBRA or you are employed but your employer does not offer health insurance coverage, you may still have low cost options.
- You can buy unemployed medical insurance online or in a local health insurance agent’s office. Make sure you only use reputable health insurance websites to buy an individual health insurance policy.
- Unemployment insurance is available in more than 40 states through state continuation insurance. Similar to COBRA, unemployed group health plans through state continuation are for ex-employees of companies employing less than 20 people. Eligibility for unemployment state continuation insurance varies by state.
- Unemployment health benefits like prescription assistance may be available to you through a pharmaceutical company. Prescription assistance helps people without insurance get the prescriptions they need.
- Check with local pharmacies to see what kind of discount drug plans they offer the unemployed. In order to compete with national pharmacies and website service, a number of smaller, locally-owned pharmacies have started discount drug plans that offer great value to you and your family.
- If you are unemployed and have an individual health insurance policy, COBRA or some other job loss insurance, check to see if mail-in prescriptions are available. With mail-in prescriptions, you get three months’ worth of medicine for the same price as one month’s worth of medicine at a local pharmacy.
- If you participate in some other government assistance program, you may be eligible for the federal Medicaid program, or your children may qualify for the federally supported State Child Health Insurance Program (SCHIP). This program provides, at low or no cost, insurance that pays for doctor visits, prescription medicines, and hospitalization. Each state has different eligibility rules, but in most states uninsured children 18 years old and younger, whose families earn less than $34,100 a year (for a family of four) are eligible. In some states, the parent of a child who receives SCHIP is also eligible for coverage for himself or herself. Visit the web site http://www.cms.hhs.gov under “Consumers” to learn more about the Medicaid and SCHIP programs and to locate the toll-free phone numbers for your state to determine if you or your family are eligible for health care coverage.
Temporary Assistance to Needy Families (TANF)
People who have children under age 18 and little or no earned income may be eligible for the Temporary Assistance to Needy Families (TANF) program. It is the United States’ federal assistance program commonly known as “welfare”. Before 1996, eligibility was determined simply by entitlement. Now, states are given grants to run their own programs. TANF provides cash assistance to families when the parent temporarily cannot work because of family responsibilities, such as caring for a very young or disabled child, or cannot find work because of lack of skills and experience. This assistance may be necessary to maintain yourself and the people who depend on you while you prepare to get a job.
TANF also can fund costs related to getting and holding a job, such as training, transportation, and childcare expenses. In 2001, across the country almost as much of TANF funds were used to cover the cost of childcare and other activities supporting work (30%) as went toward cash assistance (38%). Although this is a federal program, the cash and other types of assistance you may receive vary from state to state and the program may be known by a different name. There is a maximum of 60 months of benefits within one’s lifetime (some states instituted shorter periods) and there is a component requiring clients to attempt to find employment. The program aims to get people off the temporary assistance, primarily by getting them into jobs.
Visit the U.S. Department of Health and Human Service web site at http://www.acf.dhhs.gov/news/welfare/stlinks.htm to link to information about services in your state and contact information, or go to your local welfare office to find out what benefits you may be eligible for.
Supplemental Security Income (SSI)
If you become disabled and have a low income and few assets, you may be eligible for the Supplemental Security Income (SSI) program. Children as well as adults can qualify for SSI. As the name implies, SSI payments are meant to supplement your income if you are able to work at some level. But SSI payments will cover your basic living expenses and extra expenses due to your condition, if you cannot work. The amount of your monthly SSI payment varies depending on the seriousness of your disability and the state in which you live. To get information or to apply for benefits, call 1-800-772-1213, go to your local Social Security office, or visit http://www.ssa.gov/d&s1.htm
Workers’ Compensation
If you are injured at your job and unable to work, you may be eligible for Workers’ Compensation. These benefits include weekly payments to make up for income lost during the period of time you cannot work. This compensation may also cover your medical costs related to the injury, and pay for training in a new field if you cannot return to the same type of work you were doing. The personnel manager at your work can let you know if you are eligible for benefits. Check your state’s rules for Workers’ Compensation benefits, at http://www.dol.gov/esa/regs/compliance/owcp/wc.htm.
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Being unemployed over a long stretch of time tests one’s sanity as well as one’s wallet. Taking advantage of every resource you qualify for, and appropriately curbing your lifestyle can go a long way towards avoiding depleting your savings or getting into debt while you’re actively looking for your next job. Use them to make unemployment a much less costly experience.
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Update: It turns out that Jim, at the Blueprint For Financial Prosperity blog, also wrote an unemployment related post today : Three Morale-Boosting Tips For Job Seekers. I think both articles complement each other, so make sure you pay his blog a visit and read what he has to say!
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