Unemployment insurance is designed to replace part of an employee's income for eligible workers who are unemployed through no fault of their own. To be eligible for unemployment compensation, the individual must have previous employment in a covered occupation and continued attachment to the labor force. Characteristics of unemployment insurance include:
- Unemployment insurance payments (benefits) are intended to provide temporary financial assistance to unemployed workers who meet the requirements of State law.
- Each State administers a separate unemployment insurance program within guidelines established by Federal law.
- Eligibility for unemployment insurance, benefit amounts and the length of time benefits are available are determined by the State law under which unemployment insurance claims are established.
- In the majority of States, benefit funding is based solely on a tax imposed on employers. (Three (3) States require minimal employee contributions.)
Which of the following are TRUE statements concerning unemployment insurance/compensation?
I. Unemployment benefits are excluded from federal income tax
II. Unemployed workers are not required to be available for gainful employment
III. Compensation is typically equal to 50% of the worker's normal wages
IV. Requirements will differ from state to state
A. I and IV only
B. I, III, and IV
C. III and IV only
D. I, II, III, and IV
Unemployment benefits are included as gross income for federal income tax purposes and those receiving benefits must be gainfully seeking other employment opportunities in order to continue to receive benefits.
Superannuation typically refers to the ability to maintain your lifestyle on your current income and accumulated assets in retirement. When referenced in the context of retirement plans many people link it to the monthly payment that you receive during retirement; however, when referenced as a risk factor it refers to "outliving your income and accumulated assets".
Property Risk and Insurance
InsightsUnemployment carries many costs, both obvious and hidden, for an economy.
Financial AdvisorIf you lose your job, be sure to apply for unemployment benefits. It's not welfare, but an insurance program that you and your employer have already paid into.
Personal FinanceNatural unemployment is often defined as the lowest rate of unemployment an economy will reach.
InsightsDepending on how it's measured, the unemployment rate is open to interpretation. Learn how to find the real rate.
Financial AdvisorWhile a falling unemployment rate sounds like a good thing, it can actually be indicative of people leaving the labor force because they can't find a job.
InsuranceUnemployment compensation is a federal program administered by each state. Here's how to connect to your state's unemployment office and what to expect.
Personal FinanceFrictional unemployment is one aspect of natural unemployment, which is unemployment caused by things other than an underperforming economy.
RetirementUndoubtedly, unemployment is important for retirees and soon-to-be retirees. Also important is understanding the inflation rate as it’s reporting by the US.
InsightsThe Bureau of Labor Statistics' monthly employment figures are a key economic indicator. Here's how they work.