Unemployment compensation was designed to provide income to people who lose their job. The problem is that benefits run out rather quickly. Your claim lasts one year (your benefit year), but most states only pay benefits for 13 to 26 weeks – a little more than 6 months – during the year.
During periods of high unemployment, the federal government may extend the benefit period, but at some point, benefits will run out.
If your unemployment insurance benefits are about to end, what happens next? Unless unemployment is so high that the federal government extends the benefit period, your options are limited. But if you prepare early, you can lessen the impact when benefits run out. Here are some routes to explore.
Self Employment Assistance Program (SEAP)
If unemployment is making you think it might make sense to start your own business, check whether your state has a Self Employment Assistance Program or SEAP. This program allows people receiving unemployment benefits to get training in launching a business.
Most states don’t require people enrolled in an SEAP program to actively look for work; starting their own business is considered their full-time job, with many states requiring a full-time schedule devoted to training. SEAP members participate in entrepreneurial training programs, work with mentors and develop a business plan.
But SEAP isn’t an extension of unemployment benefits. In fact, you must be early enough in your benefit period to complete the training. You have to be receiving unemployment to be in SEAP, and some states don’t allow enrollment if don't have 13 more weeks of benefits left at the time you are accepted into the program
Because SEAP is paid for by grants, not everybody qualifies. If you meet the qualifications for the program, your state unemployment office will send you information. Given the time limitations, don't wait to be contacted. If you’re interested in the program, call your state unemployment office for more detailed information and eligibility requirements.
The SEAP program does not supply funding for the launch of your business, but any income you earn from your new enterprise will not be deducted from your unemployment check.
If you can’t find a traditional 9-5-style job, consider something different. Perhaps you have a skill that would allow you to earn money as a freelancer. Another strategy is to contact a temp agency in your area and take a temporary job. Seasonal employment – sales jobs during the holidays, for example – are a third option. Baby-sitting, tutoring or even websites such as TaskRabbit might provide work. See Make Money Fast From The New 'Sharing Economy.'
You can also try to train in new areas related to your previous career or start a business of your own, even if you can't get into a SAEP program. Some businesses, including consulting, cost very little to launch.
Food Stamps and Cash Assistance
If your funds run low enough, you may be eligible for food stamps or cash assistance. Eligibility varies, but both options are worth checking out to help you get through a difficult period in your life.
Food assistance. The term "food stamps" is no longer used – the program is now the Supplemental Nutrition Assistance Program or SNAP – but the basics are largely unchanged. The Supplemental Nutrition Assistance Program or SNAP is a federal program that provides assistance to low-income individuals and families. Check your eligibility status by clicking here.
Check with your state for any other hunger-assistance programs in addition to SNAP, especially if you have young children.
Cash assistance. These programs, which provide cash payments and other services, are administered at the state level. For example, Massachusetts has the Transitional Aid to Families with Dependent Children (TAFDC) program.
The Bottom Line
There’s no shame in taking a job outside of your career path, especially if your unemployment benefits are running out. Plan for the termination of benefits long before that day arrives. Once benefits run out, you have to be prepared.
EconomicsDepending on how it's measured, the unemployment rate is open to interpretation. Learn how to find the real rate.
EntrepreneurshipIf you are currently unemployed, a great way to make some money is by freelancing. Here are ways to help you get the most out of freelancing.
Options & FuturesReturning to school may be the key to beating an economic slump.
BudgetingPreparation can help you land on your feet after getting the "old heave-ho".
Personal FinanceThe unemployment rate is climbing, but what does it mean?
ProfessionalsBaby boomers and millennials don't often see eye to eye, but getting these two generations to play nice is important for any company.
Home & AutoLearn how much money you need to meet basic expenses in New York City as a student, as a professional and as an unemployed job seeker.
EntrepreneurshipOften the signs of an imminent firing are subtle. Keep these five in mind.
TaxesHere's what gets deducted from your pay, what your employer pays and where your payroll taxes actually end up.
InvestingGeneration Y embodies the trend towards meshing office life with play, and is creating a new and unique work/life balance.
Free online calculators for determining your taxable income are located at Bankrate.com, TaxACT.com and Moneychimp.com. Determining ... Read Full Answer >>
The unemployment rate and Consumer Confidence Index (CCI) rank as two of the most important economic indicators to consider ... Read Full Answer >>
As of 2015, on the standard IRS Form 1040, your comprehensive or total income is calculated through lines 7-22. This is different ... Read Full Answer >>
The participation rate and unemployment rate are economic metrics used to gauge the health of the U.S. job market. The key ... Read Full Answer >>
The minimum wage acts like a price floor on labor, reducing the supply of jobs available to a level below the market-clearing ... Read Full Answer >>
Rising unemployment rates tend to decrease investor sentiment and consumer confidence. Unemployment is one of the most important ... Read Full Answer >>