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Qualifying for unemployment

Last year, the Nebraska Department of Labor issued a warning: "It has come to our attention that there are Web sites offering fee-based services for filing for unemployment insurance benefits ... While their services may be legal, the same service can be obtained at no cost and at no risk of their personal information being compromised by utilizing (the official state site)."

Once a jobless worker requests benefits, the information is sent to his or her former employer. The employer then has a chance to contest the worker's stated reasons for why he or she lost the job.  

The state eventually rules for or against the worker receiving benefits.

If you're denied a claim, you can appeal the decision. You can seek legal counsel for help, but many states have a tight deadline for appeal, and workers may not have time to get legal help and meet the deadline, says Brantner.

Making ends meet

For many jobless without savings or other resources, unemployment benefits are the only means of meeting the bills.

Each state places a maximum limit on the amount the jobless can receive. Amounts are based on a percentage -- usually between 50 percent and 70 percent -- of the average weekly wages in the state. In Illinois, for instance, the maximum weekly unemployment benefit is $385 for an individual, $459 for an individual with a dependent spouse and $534 for a worker with a dependent child or children.

"There's a dramatic change in (a newly unemployed person's) budget, because you're dealing with a lot less money than you had before," says Mechel Glass, director of education at the nonprofit Consumer Credit Counseling Services of Greater Atlanta. The organization teaches classes for the Georgia Department of Labor on how to cope with reduced income after being laid off. She says the number of people taking their classes has almost tripled since the current recession began.

"You need to re-evaluate your budget immediately and look at the dollars you now have coming in and start prioritizing your expenses and paying the most important items first and addressing those so you're not in a situation where you're beginning to lose things like your home or your car."

Dolores Sherman, director of Helping Others Progress Economically, a credit counseling service in Stone Mountain, Ga., says nonprofit organizations can help close budget gaps for unemployed workers.

"The first call should be to the United Way," says Sherman. "They are a wonderful resource for information on nonprofit agencies that may be able to meet a consumer's needs."

Also, unemployed people who are supporting families should not ashamed to look into other forms of public assistance, says Sherman. "Programs like WIC or food stamps ... are a bridge designed to help you get over this troubled water that you're facing."

Better benefits

This past summer, benefits were extended for 13 additional weeks for unemployed workers who were still jobless after their initial benefits ran out, typically after 26 weeks in most states. As a result, out-of-work recipients can get extended benefits until March, says Stettner.

Benefits may be extended again, and there have also been proposals for eliminating federal income tax on benefits.

Indeed, it wasn't until the 1980s, says Stettner, that unemployment benefits began to be taxed. Now, he adds, the climate is right for legislating more relief for the jobless.

Claes Bell contributed to this report.

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