Does my website revenue count against unemployment?
November 26, 2008 11:18 PM   Subscribe

UnemploymentFilter: How do alternate income streams factor into unemployment and how many months do I have left?

I live in Chicago and am likely going to be laid off in the next couple of weeks as I was asked to re-interview for my position and it appears that despite how much everybody loves me, one key decision maker doesn't think I have what it takes. Whatever.

Anyways, so I was unemployed from around 3/5/08 - 5/19/08. I didn't draw unemployment benefits the whole time, maybe just a month and a half since I received a month's severance from the job I had prior to March.

I also now have a website I've been working on that provides on average $500/mo in passive revenue (and hopefully more in the future).

That said I have two questions:
-How do I figure out how much unemployment I have left?
-Do I have to declare my website and the revenue it generates when applying for benefits? Is there a chance it could prevent me from getting them or drastically reduce the amount I receive? How does something like that work? Its not like I'm salaried. It is essentially a sole-proprietorship with its own EIN and bank accounts.

I'm hoping that I can draw my full unemployment benefits from my last couple of jobs and still pull in the income from the site. I also am not sure how many months of unemployment I have left since I heard something like you only get a total of 12 months in your lifetime--although that could be completely false.

Any guidance you guys can give would be much appreciated as I make preparations for the likely event of being laid off.

I'm hoping that with full unemployment benefits, the income from the site and my savings, I can ramp things up and be doing my web stuff full time and get out of the rat race.

Happy to answer any additional questions that might be needed to clarify things.
posted by Elminster24 to Work & Money (7 answers total) 1 user marked this as a favorite
As I recall from being on unemployment in Illinois and having a bit of freelance income on the side, there's a risk they could find out that you have this other income and you could be prosecuted for benefits fraud.

At that time there was an automated phone system that would give you information, once you entered your PIN, on how many weeks of benefits and such. This may be online nowadays.

There were also booklets and brochures available at the unemployment office that explained how to calculate your eligibility, e.g. when you work a few hours a week.

The "lifetime total of 12 months" is false. You become eligible for unemployment at a certain point, then you have a 12-month "benefit year" during which you can draw unemployment. The amount is calculated on a points system based on your pay-in. Once you are off unemployment, or probably any time you work after applying, you begin to accrue points again. There is a window of ineligibility, but then once you become eligible the payment you get is based on the points you have paid in. Details have probably changed, but that's the gist.
posted by dhartung at 12:31 AM on November 27, 2008

Best answer: Google "total unemployed." People who lose jobs from which they earn their living are regularly denied all unemployment benefits on account of their continuing involvement in side ventures that generate little or no income. It doesn't help that it is a sole proprietorship rather than employment.

It's one of those ways that the regulatory structure of welfare, with its perverse incentives, creeps into unemployment benefits, which is funded from insurance premiums and thus is not in principle welfare.
posted by MattD at 7:54 AM on November 27, 2008

Response by poster: Fantastic answers guys. I might have to check with a lawyer on this but hopefully WCityMike what you posted is true.

I've setup my website so it has minimal time involvement (passive revenue stream) so I'm completely available to work. In fact, I've run the website while I've been working this past job and it takes up maybe 1-2 hrs a month. I just hope the revenue from it doesn't grow to a point where it can't quite support me but is enough to interfere with unemployment benefits in some way.

If I do get accepted for them, that new Extension Act is a huge blessing. That could give me the time I need to really ramp things up and make this work!
posted by Elminster24 at 12:06 PM on November 27, 2008

FYI, I'm unemployed and in Chicago, and the telephone reporting service does require that you tell them of any self-employment income you have; those will then be deducted from whatever benefits you qualify for. If you don't report those earnings, you run the risk of prosecution. So, something else to keep in mind as you plan.
posted by carrienation at 3:17 PM on November 27, 2008

I live in California so the rules may be different. I was looking into unemployment earlier this year when I lost my primary job. I had, and continue to have, a secondary internet-based job that brings in a fluctuating amount, averaging about $750/month. At the time, based on what my weekly unemployment checks would have been (which is calculated by your income of the previous year) I was making too much on the side to be eligible for unemployment. So in this case it didn't matter that my second job was a home-based "passive" computer job, it just mattered that I had a source of steady income. YMMV.
posted by Bella Sebastian at 4:45 PM on November 27, 2008

interesting question and my situation relates:
I was just told that I will be laid off tomorrow, November 28th. However, two days ago i received a Tax EIN because I wanted to open a business account at my local bank. I signed up as a sole proprietor for the EIN. The sole proprietorship is just a side project i wanted to make look professional for the individual who would like to invest. As it turns out, the individual investor in this business wrote me a check for $5,000, it cleared, and now called me to tell me he wants his money back and he no longer wants to be involved in the project. I am worried that when i apply for unemployment on Monday, they are going to tell me that I don't qualify because I have I am a sole proprietor (have a sole proprietor EIN with my social security number), or that because i received $5,000 in a bank account that lists me as the sole proprietor a lot of issues might arise.

Can someone please advise if i should be worried and what i should do?

posted by vivitron at 9:21 PM on November 27, 2008

by the way, this all takes place in NY. Thanks
posted by vivitron at 9:22 PM on November 27, 2008

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