What Happens When Your Unemployment Claim Is Denied?

It's important to know you're not out of options.

Although the U.S. jobs market is generally strong, a number of major companies have already announced layoffs this year. Meanwhile, a recent SecureSave survey found that 67% of Americans don't have the money on hand to cover an unexpected $400 expense. If you're in a similar situation and have little to no money in your savings account, then you may be counting on unemployment benefits to help you pay your bills after losing a job.

Generally, you're entitled to unemployment benefits when you lose a job through no fault of your own. So if your company runs into financial difficulties and needs to slash 20% of its staff, and you happen to land in that 20%, you may be entitled to unemployment benefits through your state or the state you were employed in, if it's different from your home state.

But it's possible for an unemployment benefits claim to be denied. And if that happens to you, you should know that you're not automatically out of options.

Why might your unemployment claim get denied?

There are different reasons why your unemployment claim might get rejected. First, a simple error on your application could result in a denial, so you'll want to review your details carefully before submitting a claim.

Otherwise, you may be denied unemployment benefits because you've failed to meet your state's earnings requirements. You'll usually need to have worked for a certain period of time or have earned a certain amount of money within that period of time to be eligible for jobless benefits, and the specifics vary by state.

You should also expect to be denied unemployment benefits if you've left your job voluntarily, including accepting a voluntary buyout from your employer. Furthermore, unemployment benefits are for people who lose their jobs due to circumstances beyond their control. If you've been fired for misconduct, poor performance, or violating the terms of your employment agreement (such as not reporting for work during your scheduled hours or failing to report to an office when you're required to show up in person), that could lead to an unemployment claim rejection.

Finally, your unemployment claim may be denied if there's evidence that you've refused to accept a suitable job.

What to do if your unemployment claim is denied

Your state won't just deny your jobless claim and stay quiet about it. Rather, you'll receive a notice explaining why your claim for unemployment benefits has been rejected. From there, you can review the reason. If you feel that you're still entitled to unemployment benefits, you can appeal your denial.

The appeal process can vary depending on the state you live in. You may be required to show up for a hearing to argue your case. You may also need to gather evidence in support of your argument.

Unemployment benefits can be a lifeline when you lose your job unexpectedly. But unfortunately, they're not guaranteed. If you don't meet the right criteria, your claim could be denied, leaving you to scramble and rack up credit card debt in the absence of an income. So it's important to build up some emergency savings so that if you lose your job and aren't eligible for unemployment, you're not totally left in the lurch.