Unemployment benefits, also called unemployment insurance, unemployment payment, unemployment compensation, or simply unemployment, are payments made by authorized bodies to unemployed people.
In the United States, benefits are funded by a compulsory governmental insurance system, not taxes on individual citizens.
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Depending on the jurisdiction and the status of the person, those sums may be small, covering only basic needs, or may compensate the lost time proportionally to the previous earned salary.
The UI program supports millions of workers who lose their jobs through no fault of their own every year. Typically, more adults receive UI during times of economic recession, and fewer adults receive it during times of economic expansion.
Often, Congress extends the number of weeks workers can collect UI during recessions, as it did during the so-called Great Recession from December 2007-June 2009.
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Emergency Unemployment Compensation (EUC) was available in some form from 2008 through 2013. The Great Recession unemployment rate peaked at 10% in October 2009, but the lingering effects of the recession and the availability of extended benefits under EUC were evident in elevated receipt of UI as late as 2013.
According to the Survey of Income and Program Participation (SIPP), in 2018, the share of adults who received Unemployment Insurance (UI) at some point during the year reached a six-year low as the economy strengthened following the Great Recession.
SIPP is a nationally representative longitudinal survey administered by the U.S. Census Bureau that provides comprehensive information on the dynamics of income, employment, household composition, and government program participation.
7 in 10 adults who received UI at any point during 2018 received it for three months or fewer.
The federal government responded to the challenges of the COVID-19 pandemic by transforming the UI program.
The program underwent several temporary changes under the Coronavirus Aid, Relief, and Economic Security Act (CARES) Act enacted in March 2020.
Weekly benefit checks were increased by $600 and the number of weeks of benefits available were extended.
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It also created the Pandemic Unemployment Assistance (PUA) program, allowing individuals who were not previously eligible for regular UI — such as workers with shorter work histories, self-employed workers, independent contractors, and gig workers — to receive benefits if their employment was affected by COVID-19.
Administrative UI data from the Department of Labor show the magnitude of disruption and changes to the UI program triggered by the pandemic.
In the second quarter of 2019, before the pandemic hit the United States, 2.6 million UI claims were filed. In the second quarter of 2020, 33.7 million claims were filed.
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