Can People Work Part-Time on Unemployment Insurance?

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Unemployment benefits have eased the financial woes of many individuals and their families during the past few years of a difficult economy and high unemployment. For many, though, the amount of benefits do not always cover all of the monthly expenses for the recipients. Some people attempt to find part-time work to supplement their finances while pursuing full-time employment. It is worth doing some homework though, since in some cases, making part-time income impacts the eligibility of these individuals to keep receiving unemployment benefits.

Part Time Work

There are many reasons a person eligible for unemployment benefits can have part-time income while also receiving benefits. Some people file their unemployment claim when a full-time job ends, even though they may still be kept on with an employer part-time. Others find a new job soon after filing their claim; however, the job only provides part-time work. Unemployment benefit laws vary by state, but certain states do allow for some part-time income, based on a specific formula, while receiving unemployment benefits.

Calculating Allowed Income

Starting with the current weekly benefit amount from unemployment, a specific formula is used to calculate the amount of unemployment benefits that may be kept during any week in which someone earns income from part-time work.

As an example, the state of Massachusetts allows people to earn wages equal to one third of the amount of their unemployment benefits, and still get the whole amount of benefits. Any wages earned that exceed one third of the unemployment benefits (not including allowances for dependents)and still get his full benefit amount. Any wages earned over the one-third threshold results in a reduction, dollar-for-dollar, of the weekly benefit.

For another example, take California, which uses a variation of this method. For any wages from a part-time job, the first 25% or $25, whichever is larger, does not impact a person's unemployment income. Any amount that exceeds this will reduce the amount of benefits received. If individual makes more wages than his weekly amount of benefits (after deducting the 25% or $25) in any given week, he will no longer be considered an unemployed person for that specific week, and is not considered eligible for unemployment benefits in that specific time period.

Individuals are recommended to read the unemployment benefits policies for their home state to find out the laws for their particular situation. The states usually offer this information on their websites; however, it is not always easy to find,

Unused Unemployment Benefits

Each state differs in the way it treats unused unemployment benefits. Back to the Massachusetts example, for any given week an individual is not considered by the state to be unemployed, this means he will not receive benefits. Massachusetts does not categorize an individual as unemployed anymore, once they earn wages in any specific week that exceed the one-third deduction cut off. Subsequently a person's benefits will stay unused in his unemployment account while he is considered to be employed, and any unused benefit money will be available for future weeks. This means the unemployment payments can extend past the original benefits time frame.

Important Considerations

If an individual takes a part-time job, and is later let go from it for reasons other than a layoff, unemployment eligibility has to go through a re-evaluation. If a person was removed from his part-time job under any circumstances that would disqualify him from receiving benefits, for example being fired, his original weekly unemployment benefits amounts might be permanently reduced. If an individual works in a contract position and his job ends before his benefit year is over, (one year after his original benefits filing date), his claim could be reopened, letting him use the rest of the year to receive any of his remaining unemployment benefits. If a person's benefit year ends while he is working, a new unemployment claim needs to be filed, and a new eligibility determination will be performed. This new determination will be based on job income from the more recent periods, which could be less than the initial income base on which the unemployment benefits were calculated. This will result in a smaller weekly unemployment benefits amount.

Different perspectives on unemployment...

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