Calculating Unemployment Benefits: Understanding the Process
Unemployment benefits are an extremely useful resource for many people who cannot find work, but it is often the case that many do not understand how benefits are calculated. That said, here's a simple overview of how these benefits are calculated to help you better understand the process.
Eligibility requirements for Unemployment Insurance benefits in 2024:
To be eligible for Unemployment Insurance benefits, one must have earned at least $283 per week for at least 20 weeks (approximately 4 and a half months) during a base year through work that is protected by labor laws, as well known as covered employment. Alternatively, one may qualify if they have earned at least $14,200 during a base year through covered employment.
Note: A “base year” is defined as the period of time used to determine eligibility and calculate UI benefits. The “base year” begins from the date of the claim. A “base week,” like the “base year,” is used to calculate the amount of UI benefits one is entitled to. The “base week” is calculated as 20 times the state minimum hourly wage on October 1 of the previous calendar year, which is currently $283 per week.
Weekly Profit Rate (WBR):
Once you are eligible, you will receive money each week known as the Weekly Benefit Rate, which depends on your earnings during the base year before you apply for UI. This amount is equal to 60% of the average weekly wage during the base year, but will not exceed $854 by 2024. If you believe you are entitled to more money because an employer did not report wages, you can contact the New Jersey Department of Unemployment Insurance for a monetary review. Be sure to provide proof of income using documentation such as pay stubs.
Dependency Benefits:
If you have dependents and your WBR is less than the maximum amount ($854), you can apply for Dependency Benefits. This benefit is equal to 7% of your WBR for the first dependent and 4% for each of the next two dependents, not to exceed 15% of your WBR for up to three dependents. Dependency benefits must be applied for within 6 weeks (approximately 1 and a half months) from the date of application.
Maximum Benefit Amount:
Your Maximum Benefit Amount is calculated by multiplying the number of weeks worked in the base period (no more than 26) by your WBR (up to $854). Therefore, the maximum overall benefit amount for 2024 is $22,178. After one year of unemployment, you can reapply for benefits, which will be recalculated based on a new base year. Qualifying for a new claim requires working for at least 4 weeks and earning 6 times your previous WBR under covered employment, in addition to meeting other eligibility requirements. If you obtain a job and then become unemployed before the one-year mark, you must reopen your claim immediately; your WBR will remain the same.
Partial benefits:
You may still be eligible to receive partial UI benefits if your work hours are reduced to no more than 80% of your normal hours. If you earn 20% or less of your WBR from your employer in a week, you can receive your full WBR for that week. If you earn more than 20% of your WBR from your employer, your WBR will be reduced for every dollar in wages earned that week. Be sure to report gross earnings when they are earned, not when they are paid. Election Day earnings do not need to be reported.
Source: Unemployment Insurance Division | How we calculate benefits (nj.gov)
Source: Unemployment Insurance Division | Glossary (nj.gov)
Source: What is covered employment? (January-February 2019) (indiana.edu)
Source: Unemployment Insurance Division | Contact us (nj.gov)
Source: Unemployment Insurance Division | How to claim dependent benefits, if you're eligible (nj.gov)