During difficult economic times, unemployment insurance can be a lifeline that keeps workers afloat until they can see a light at the end of the tunnel. For those employees whose contracts include a severance clause, knowing how to maximize their benefits if they are laid off is crucial when the market shrinks. And times are hard right now. Across the United States, unemployment has risen to 8.4%, and in Kentucky  unemployment went up 3.1% in August 2020, to 7.6%.

Getting unemployment benefits means meeting certain eligibility requirements as well as going to the right office to start the process. Many recently laid off workers may not realize the benefits that they can obtain during unemployment, or how long those benefits can continue.

Where does unemployment insurance come from?

Unemployment benefits come from taxes, specifically payroll taxes, that are paid by employers to be collected by state and federal governments. Kentucky has a flat withholding tax of 5% with a formula for calculating the percentage of payroll deduction. In addition, some urban areas add on an occupational tax; the city of Louisville’s is 1.4%.

How can I get unemployment insurance?

If you live and work in Kentucky and are laid off from your job through no fault of your own, you will likely be eligible for unemployment benefits. If the job termination was not due to sub-standard performance or misconduct, to qualify the former employee must have worked long enough to qualify for unemployment benefits and be actively looking for another job.

To find out the formula for calculating the maximum benefit someone can receive in Kentucky, determine the lesser of 26 times the worker’s weekly benefit, or one-third of his base-period wages, the maximum being no less than 15 times the weekly benefit rate.

If you quit for good cause and have enough credits to start a claim, you can be eligible for benefits. And you may also qualify for partial benefits if your hours have been reduced.

Learning where to get more information about unemployment insurance, or understanding the extent of your benefits in a severance package, is an important first step to moving on after losing a job.