Question by Lincoln08: How does unemployment welfare work in the USA?
I have heard that people have “unemployment” costs deducted from their wages every payment? Is that an unemployment tax to pay for people trying to find work or is it like forced savings in case you yourself become unemployed so you have that money to fall back on. I am not Amercian so am not even 100% sure any of the above is correct.

If you are unemployed in the US can you recieve unemployment payments (as long as your actively seeking work that is)?

Best answer:

Answer by Little Princess
Those are two different programs, unemployment insurance and welfare. While someone is employed, their employer pays into unemployment for them (kind of like insurance premiums). If that person loses their job by not fault of their own (i.e. they don’t quit or get fired for cause, but rather the company just cant afford to keep them employed or something like that), then they are eligible to receive unemployment benefits.

Unemployment benefits are scaled to what they use to make while they were working and (supposedly) require them to be actively seeking employment. Normally people would only have six months of these benefits, although the government has given extensions (sometimes upwards of two years). They are designed to help hold people over while they’re between jobs. They are not means tested; that means someone could be a multimillionaire and still receive their unemployment benefits (they effectively paid in to it so should deserve the benefits).

Welfare, on the other hand, is money the government gives people who are poor and either unemployed or underemployed. Welfare is means tested to ensure that it’s only given to poor people who are ‘needy’. Its purpose is to make sure that people aren’t starving out in the streets and such. It comes in the form of either direct money or food-stamps (which aren’t really stamps any more, but rather a government issued debit card). Food stamps are limited in that they can only be spent on approved food items.

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