Downsides to Taking Unemployment Insurance?
July 27, 2021 3:01 AM   Subscribe

I have never taken unemployment before, but according to my state's calculator (Oregon), I may qualify for, what is to me, a significant amount of money. I teach year-round at a college on a class-by-class basis, usually teaching two classes at a time. A couple of months ago, due to low enrollment, I was dropped to teaching one class, and this may go on for some time. (Not sure if these particulars matter, but I thought I should include them in case they affect my question). Are there any downsides I should know about before applying?
posted by anonymous to Work & Money (8 answers total)
 
Nope.

If you qualify, there is no downside that I know of. It is unemployment insurance. You presumably have been paying the insurance. That is what insurance is for, to be used when you meet the criteria set by the insurer in this case the state and federal governments.

The only downside would be if you have a psychological aversion to getting assistance, but this is not a handout, it is a payout of insurance for which you have paid premiums through your taxes on earned income. Your employer has also been paying into the pool.

Some states make you pay taxes on UI. Not sure if Oregon is one of them.
posted by AugustWest at 4:26 AM on July 27 [5 favorites]


This: "this is not a handout, it is a payout of insurance for which you have paid premiums through your taxes on earned income." While no one wants to be on UI forever, many more people could benefit from the idea the insurance is there to support, it isn't a guilt machine or a crutch. It's designed to alleviate poverty (in theory).

Suggestions are joining the Reddit threads and downloading an autodialer app.
posted by firstdaffodils at 4:32 AM on July 27


In general, no, there is no downside to applying for unemployment - like the above posters have said, it's insurance, meant to be used in these sort of emergency situations.

There may be some practical complications and things to consider as you do -

(Ohio-unemployment-filter, to some extent (each state runs their program a little differently, I have both pre and during COVID experience in Ohio)):

I may qualify for, what is to me, a significant amount of money. I teach year-round at a college on a class-by-class basis, usually teaching two classes at a time. A couple of months ago, due to low enrollment, I was dropped to teaching one class, and this may go on for some time. (Not sure if these particulars matter, but I thought I should include them in case they affect my question).

They might, depending on the terms of your employment. From the Oregon UI Which type of unemployment benefits should I apply for? page:
If you are an employee--and this includes some gig workers (whose employers are supposed to pay payroll taxes on their wages)--apply for regular unemployment benefits.
If you are self-employed, an independent contractor, or a gig worker whose employer is not required to pay payroll taxes on your wages, apply for Pandemic Unemployment Assistance.
Take our Eligibility Quiz to help figure out which unemployment benefits to apply for.
It is important to apply for the right program--otherwise, your benefits will be delayed. If you apply for benefits you don’t qualify for, we will let you know, and will help you apply to the right program.
If you qualify only for PUA & not regular UI, note that that is a special COVID program that expires in early Sept. (As of this moment - it could possibly be extended by Congress.)

I may qualify for, what is to me, a significant amount of money

Note also that part of the Federal COVID UI response was adding $300 per week to benefits - this also (as of now) is set to expire in early Sept.

And generally speaking (it's a bit hard to tell from the Oregon website without signing up), if you work part time or occasionally while on unemployment, your benefits received are reduced by some amount - i.e. you qualify for $500/week in benefits, your one class per week pays you $200/week, you claim that income when you file your weekly unemployment claim, and you actually receive $425 or something. (I just made those numbers up, the actual benefit calculation is a complex formula.)

NOT saying you shouldn't apply, just maybe setting some expectations for how much you will actually receive.

Are there any downsides I should know about before applying?

Here is the one "downside" - there has been a lot of fraud and fake claims and overpayments as the UI systems have been overwhelmed due to COVID. Most states are now trying to crack down and resolve all this at this (relatively) late stage, so 1) have your W2's or 1099's and 2019 & 2020 tax returns ready for reference/proof and 2) if there's any irregularity or an honest mistake in your initial filing and/or weekly claim, you could wind up stuck in Bureaucratic Hell and have to spend a bunch of time resolving the issue, and the phone assist programs are generally overwhelmed. You could even wind up with scary "you were overpaid, give us a big pile of money back" letters. (Which of course will not apply if it's an honest mistake, but it can take a while to get it sorted out.)

IOW, a year ago the systems were kind of throwing money at people - now they're back to viewing all claims slightly suspiciously, so it's in your best interest to have all your T's crossed and your i's dotted.

SO - read all the FAQs, follow the step-by-step instructions on the website, do as much as possible online, double - no, triple-check all of your answers & buttons checked and whatever before doing your initial claim & weekly filings.

AND ALSO - I see that in Oregon you can either set up direct deposit or get your benefit money on a US Bank debit card. HOLY FUCK DO DIRECT DEPOSIT even if it takes a little longer to get your first payments. I started with that card in Ohio and it was IM-FUCKING-POSSIBLE to transfer money from that card to my regular account, or to set it up to pay bills, or to do anything but walk into a store in person and buy stuff.
posted by soundguy99 at 6:20 AM on July 27 [1 favorite]


Soundguy: dm'd!
posted by firstdaffodils at 6:44 AM on July 27


Here is the one "downside" - there has been a lot of fraud and fake claims and overpayments as the UI systems have been overwhelmed due to COVID....You could even wind up with scary "you were overpaid, give us a big pile of money back" letters.

This is definitely happening here in Indiana, as the state has sent notices to a huge number (most? all?) of UI recipients that they must pay back thousands. It should be noted that the state is doing this without any actual proof that fraud or over-payment has occurred.

It's more of a move to force people to go back to work by both curtailing their UI benefits and making them pay back what they received. It's an outgrowth of the right's specious belief that UI is too generous and people are opting to stay on UI rather than go back to work.
posted by Thorzdad at 6:53 AM on July 27


no. no no no. there is no downside. play by the rules, rest easy. unemployment saved my ass.
posted by j_curiouser at 8:24 AM on July 27


If you're not averse to paperwork and bureaucracy and scary warnings, it's fine.

Oregon Unemployment is swamped, and you have to really be on top of them. It can be very hands-on at times, you may have to repeat yourself, you may have to shout into the void, you may have to be a good self-advocate, and occasionally it may be nerve-wracking anyway.

But it pays great!
posted by aniola at 9:18 AM on July 27 [1 favorite]


Last addition: if anonymous is comfortable DMing, I'm available to answer questions. I feel like I essentially became a pro at navigating a very funky system. Agree with all others: if you are persistent and organized, it can work for you and quite well.
posted by firstdaffodils at 10:21 AM on July 30


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