Why The Unemployment Benefits For The Self Employed May Not Meet Many’s Expectations

This article was last updated on April 16, 2022

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Working as a self employed person comes with a lot of freedom to do your work when and how you want, however it also comes with a great deal of responsibility. You are the one that is solely responsible for generating your income and making a living. You are not able to depend on anyone else to take care of you and your family.

In the past, self employed workers were not even able to collect unemployment if they had a rough year or season. Self employed workers would have had to take out self employed loans to keep their business afloat. The current unpredictability facing the nation with the coronavirus pandemic has changed the rules and given self employed workers other options in addition to taking out self employed loans. Since this pandemic is affecting the majority of the population, including those who are unemployed the rules for who can and cannot collect unemployment have drastically changed.

In the past, the government would never have ordered some businesses to close their doors and suspend their business. However, the coronavirus has people acting and behaving in ways that were never seen before. To help keep hospitals from getting overwhelmed and to reduce the spread of the virus the government in most states has suspended work for non-essential workers. This has forced many self employed workers to shut down business until progress is made with the disease.

Since these self employed workers are not the ones choosing to close their doors there needs to be options available for them to make a living. The government has since changed the rules and regulations for who is able to collect unemployment. Today, if your business has been affected by the pandemic you are able to collect unemployment as a self employed worker.

What is the Pandemic Unemployment Assistance?

If you are a self employed small business owner who has been affected by the pandemic you are able to collect benefits from the pandemic unemployment assistance, or PUA. This new federal program is part of the Coronavirus Aid, Relief, and Economic Security, or CARES, Act. This assistance program allows people to collect up to 39 weeks of unemployment benefits if they are affected by the pandemic.

How To Tell If You Qualify for Unemployment?

There are many things that can qualify you for collecting this pandemic unemployment assistance if you are self employed. To be sure if you can collect or to get the advice you should see a financial professional who is capable of answering all of your questions. These financial institutions are equipped to help you fill out forms and applications and can file them on your behalf to the federal government.

If you or someone in your immediate family has had COVID-19 you are likely able to qualify for this employment. Also, if you are unable to get to work because of stay at home orders or are forced to quarantine because of COVID-19 you are also likely able to collect these benefits. Other reasons that you may qualify include scheduled to start a new job during the outbreak, having your business closed due to the outbreak, or having COVID-19 limit your ability to do your work at full capacity.

How Much Can You Collect?

While the rules and regulations are still a little unclear it has been stated that those who qualify to collect benefits from the PUA program are able to collect up to half of their full time wages. Many people are also able to collect an additional six hundred dollars a month if they qualify for receiving aid through the Federal Pandemic Unemployment Compensation program.

If you are able to do your work online and from home, you will likely not be able to collect benefits. These benefits are meant primarily for those who have had to close down their business due to the regulations set by federal and state laws.

Many states are requiring employees to file for unemployment each week if they are getting benefits from PUA. Since the economy is still very unstable many people are able to find work one week but unable to find work the next week. This instability has many people concerned about work and finances. The government has allowed people to collect unemployment one week and not the next week if needed. This allows people to work when they can, but have a backup plan when they cannot.

Rules About Collecting For Self-Employed Workers

As a self-employed worker, you are likely in a different situation than many others. You are unable to look for new work because you are simply waiting to reopen your business. Since the government is dealing with this situation a lot right now they have relaxed the requirement for people to look for new work. This allows people to not look for new jobs while they temporarily collect these benefits.

The new rules also state that you can continue to work while you collect these benefits. As long as your work has declined because of the pandemic you are likely still able to collect. You must report how much work you have done that week and how much you have made.

If you are collecting unemployment benefits you must report when you receive income. The income that you receive will be adjusted by your state and they will determine how much you are able to collect. Even if the income is given to you from a past job you must report the income to the state so that you are not in trouble.

Since many self employed workers work in a variety of different jobs and areas it is crucial that you look into your individual state's rules about their specific unemployment guidelines. Each state has its own regulations and to ensure you are not missing out on income you should speak directly with a financial counselor in your state to determine if you are eligible for PUA benefits. They can also help you determine how much you can collect and how often you need to apply.