As COVID-19 continues to wreak havoc on the U.S. economy, workers are already feeling the pain. An estimated 18% of employees have already been laid off or seen their hours cut in the past few weeks, and if business shutdowns continue, that percentage could easily climb.

If you've lost your job in the course of the COVID-19 outbreak, you may be entitled to unemployment benefits. In fact, the federal government is letting states expand eligibility for unemployment because of the widespread impact of COVID-19, so if you're out of a job, it pays to file a claim.

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Image source: Getty Images.

How unemployment insurance works

If you've lost a job through no fault of your own (meaning, you weren't fired for cause), you can generally file for unemployment provided you meet your state's eligibility requirements. Typically, you'll need to have earned a certain minimum to collect benefits, which can vary by state. If you're out of work temporarily because the business you work for is shut down due to COVID-19 concerns, or due to a government mandate (such as if you work for a concert venue or bar), you may be eligible for benefits even if you're expected to get your job back once those restrictions are lifted.

Furthermore, if your hours have been cut because of the current situation, you may be entitled to partial unemployment benefits. That said, if you're self-employed and can no longer earn an income because the nature of your work isn't safe in today's climate (say, you're a personal trainer who works at gyms or travels to see clients), you're generally out of luck on the unemployment front, as those who work on a freelance basis usually can't collect benefits.

How much financial relief will unemployment benefits provide?

If you're hoping your unemployment benefits will replace your entire paycheck, think again. In most cases, they'll replace less than half of your usual earnings. The exact amount you're entitled to will depend on where you live and what your income looked like prior to losing your job. Your unemployment benefits are calculated as a percentage of your former earnings, up to a certain maximum that varies by state. Typically, you can collect unemployment for up to 26 weeks, but during periods of economic turbulence, that time frame could be extended (as it was during the Great Recession).

How do you file for unemployment?

You can submit a claim for unemployment benefits online through your state's department of labor. To file, you'll need key information, like your:

  • Social Security number.
  • Bank name and account details for direct deposit of your benefits.
  • Most recent employer's name, address, and phone number.
  • Length of employment history with your most recent employer, including your last day of work.

Keep in mind that most states have a waiting period you'll be subject to before unemployment benefits start rolling in. That could be a week or longer. Furthermore, because many states are seeing a massive uptick in unemployment claims now, it could take longer than usual for yours to be processed, which means that if you file today, you may not get any money for a good two to three weeks. Try to be patient; if you have emergency savings, that's what they're there for.

The COVID-19 situation is unprecedented, and it's too soon to tell how long we'll be grappling with it. If your job has become a casualty, don't hesitate to file for unemployment benefits and get some financial relief during an otherwise trying time.