Can I Make Money While I am Collecting Unemployment Benefits?

Many people are in a financial predicament right now; making ends meet has been difficult.  Because of the pandemic caused by the Coronavirus, people have either lost their jobs or had their hours cut.  The good news is, if your hours have been reduced and you no longer make enough to cover your expenses, you may be able to claim benefits to top up your income.

Out of Work Population

The number of people out of work or who have had hours cut recently is beyond anything we have seen before.  Many people in this position require assistance to ensure they can pay their mortgage or rent and have other life necessities.

Of these people, many are applying for Unemployment Benefits (UI) for the first time.  The tricky part may be trying to figure out who is eligible and who is not.

Some may believe that if they are still working, even a little bit, they may not qualify.  However, this is a myth.  The government feels it is essential for people to remain in the workforce to the degree possible.  That means that if you earn less in part-time work than what you are receiving in benefits, you can keep working.

The Rules

Each state has its own set of guidelines for UI, so it is important to know the requirements for your state.  However, in all states, additional money has been made available by the federal government.

Also, freelance and gig workers are now eligible to receive UI benefits.  Because they may not be making as much income as they were prior to COVID-19, self-employed workers may be looking for some assistance.

The specific rules affiliated with working part-time while collecting benefits will vary depending on the state in which you live.  Each state has a formula for calculating how much money you can earn and how many days you can work and remain eligible for the benefits.

To Work, or Not to Work

If you can work, but you are not earning enough income, you can collect partial benefits.  To do this, ensure that you are keeping careful and accurate notes of your earnings during this time.  You will have to fill out weekly or bi-weekly reports for your UI benefits, and all income must be reported.

If you fail to report the work and the government finds out, they will require you to pay back the benefits you have received, and there may also be financial penalties imposed.

In many states, the government will subtract your part-time earnings from your benefits and pay you the remainder.  Other states will only deduct 50% of your part-time earnings and pay out the remainder.  You need to be aware of the policy in your state.

No matter where you live, you only want to take part-time work if you know you will stick with the job.  Suppose you voluntarily leave a position that is not a good fit. In that case, you will no longer be eligible for Unemployment Benefits.  One requirement for UI benefits is that you are involuntarily out of work.

There may be exceptions if you need to leave the job for a justifiable reason.  Reasons considered justifiable would also vary from state to state.

How Long Can I Collect Benefits?

Most states will allow for 12 to 26 weeks of eligibility for unemployment.  With the given circumstances surrounding COVID-19, the federal government has extended the period of eligibility for an extra 13 weeks on top of what each state offers.  

Your benefits do not have to be used consecutively. If you take a job and then that business is forced to shut down or something else happens, you will be able to reapply for benefits.

So, while you can make money while collecting UI benefits, the amount you can make will vary, and your earnings need to be reported.