3 Reasons You May Not Get Unemployment Benefits if a Recession Hits in 2023

Don't assume those benefits are a given.

Will a recession batter the economy in 2023? It's certainly a big concern for a lot of people.

In fact, experts spent much of 2022 warning that economic conditions will worsen at some point in the near future. And so it's not unreasonable to think that a downturn could strike within the next 12 months. And that could lead to a notable uptick in layoffs.

Now the good news is that many people who lose a job through no fault of their own end up being eligible for unemployment benefits. Those generally won't replace your missing paycheck in full, but they're an income stream to fall back on nonetheless while you look for a new job.

But not everyone is eligible for unemployment. And if these circumstances apply to you, you may not be able to collect unemployment benefits if you find yourself out of work in 2023.

1. You didn't earn enough money to qualify

Most states require you to have worked for a certain amount of time and earned a certain amount of money prior to applying for unemployment. If you don't meet that requirement, you may find that your benefits claim is denied. The specifics here do vary by state, so there's no universal amount of earnings that puts you in the "safe zone" with regard to unemployment eligibility. Rather, you'll need to see what your specific state's rules look like.

2. You're self-employed

In 2020, when the start of the COVID-19 pandemic fueled a massive unemployment crisis, lawmakers changed the rules to allow self-employed people to temporarily receive unemployment benefits. But that emergency aid is long gone. And so if you're self-employed and your workload dries up in 2023, you most likely will not be eligible to collect unemployment benefits from your state.

3. You're unable to work

You might lose your job at a time when you're about to have a baby, or when you need to take a break from work to help care for an injured family member. To qualify for unemployment benefits, you need to be able to perform a job and be available for one. If you can't satisfy those requirements, you won't be eligible for benefits.

Don't assume unemployment benefits are a given

While many people who get laid off at work do end up qualifying for unemployment, that's not automatically the case. And so it's important to have a decent amount of cash in your savings account in case your main income stream disappears and you're not able to get benefits from your state to help make up the difference.

In fact, at a minimum, you should aim to have enough money in savings to cover three full months of essential bills. Added savings will buy you even more protection in the event of a layoff. So while we're not guaranteed to see the economy take a turn for the worse in 2023, it's a good idea to prepare for that possibility by boosting your savings in case unemployment benefits don't come through for you.