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Don’t take these benefits for granted.

Main points:

  • Unemployment benefits can save you if you lose your job through no fault of your own.
  • Some people are not eligible for unemployment, and it’s important to know if you fall into that category.

Will a recession hit the economy in 2023? It’s certainly a big concern for many people.

In fact, pundits have spent much of 2022 warning that economic conditions will worsen at some point in the near future. And so it’s not unreasonable to think that a downturn could happen in the next 12 months. And that could lead to a significant increase in layoffs.

Now, the good news is that many people who lose their jobs through no fault of their own eventually qualify for unemployment benefits. They generally won’t completely replace your missing wages, but they’re an income stream you’ll still have to fall back on while you look for a new job.

But not everyone is eligible for unemployment. And if these circumstances apply to you, you may not be able to collect unemployment benefits if you find yourself out of a job in 2023.

1. You haven’t earned enough money to qualify

Most states require that you have worked for a certain amount of time and earned a certain amount of money before you can apply for unemployment. If you don’t meet that requirement, you may find that your benefits claim has been denied. The specifics here vary by state, so there’s no universal amount of earnings that puts you in a “safe zone” for unemployment eligibility. Rather, you should see what the rules are in your particular state.

2. Are you self-employed?

In 2020, when the onset of the COVID-19 pandemic fueled a massive unemployment crisis, lawmakers changed the rules to allow the self-employed to receive temporary unemployment benefits. But that emergency is long gone. And so, if you’re self-employed and your workload eases in 2023, it’s likely no be eligible to collect unemployment benefits from your state.

3. You can’t work

You may lose your job when you are about to have a baby, or when you need to take a break from work to help care for an injured family member. To receive unemployment benefits, you must be able to work and be available for it. If you fail to meet these requirements, you will not be eligible for benefits.

Don’t assume unemployment benefits are a given

While many people who are laid off to do ends up qualifying for unemployment, it doesn’t automatically. And so it’s important to have a decent amount of cash in your savings account in case your main income stream disappears and you can’t get benefits from your state to help make up the difference.

In fact, at a minimum, you should aim to have enough money in savings to cover three months of basic bills. The added savings will give you more protection in the event of a layoff. So while we’re not guaranteed the economy will take a turn for the worse in 2023, it’s a good idea to prepare for that eventuality by adding to your savings in case unemployment benefits don’t hit you.

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