Photo by FaceMePLS
President Obama signed the economic stimulus package into law last week. Whatever you think of it, it’s important to know that there are a few key changes for people who are unemployed. If you’ve lost your job, or think you might soon, here’s what you need to know:
- You’re getting a raise. Your unemployment check will be going up by $25. That’s probably not going to rock anyone’s world, but every little bit helps. Most people will also be eligible for an extension well beyond the usual 26 weeks of payments; check your state website to see how this will work for you.
- You’re not paying taxes. Unemployment benefits are taxable. In 2009, though, the first $2,400 of benefits will be tax free. After that, you’ll still have to pay income tax on the unemployment benefits you receive, so plan accordingly.
- Your COBRA payments are about to be much cheaper. In most cases, if you lose your job, your employer must allow you to continue your health insurance for up to 18 months. The catch is that you have to pay the full amount (not just the premiums you pay now, but the part your employer pays as well). This can be crushingly expensive. As a result of the new law, if your job is eliminated between September 1, 2008 and December 31, 2009, the government will subsidize 65% of your COBRA payment, for up to nine months. You’re eligible if you don’t make too much money ($125,000/year for individuals, or $250,000/year for married filing jointly, in the year in which you receive the subsidy). The subsidy goes directly to your employer, not you, so you don’t have to deal with the government to get your money-just pay your 35% share. Contact your former company’s HR department to see how this works for you, even if you declined coverage last fall. Normally, you don’t get to change your mind once you turn down COBRA, but now you get a second chance to elect coverage and receive this subsidy. That’s a good deal.
As always, thanks to Anna at ABDPBT, who started the Fighting Listlessness on Mondays trend in blogging. Anna’s blog isn’t about jobhunting; it’s about other, way more interesting things. I highly recommend it.