What is Unemployment Insurance? 2021’s New Conditions and Benefits Explained.

Unemployment insurance has been a vital support for workers during these turbulent economic times. But what exactly is unemployment insurance, and what are the conditions and benefits for 2021? A safety net for the unemployed, this insurance provides financial assistance to those who have lost their jobs through no fault of their own. It is a crucial support system, offering a lifeline to those facing unexpected unemployment. So, how does one qualify for this benefit, and what are the latest updates for the coming year?

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Unemployment insurance policies are designed to support and alleviate economic hardships faced by workers during difficult economic times.

1What is Unemployment Insurance?

Unemployment Insurance

Unemployment insurance is becoming increasingly important for workers during these challenging economic times.

Unemployment insurance is a scheme that partially replaces lost income for unemployed workers, assists them in learning new trades, and supports their job search efforts, all funded by contributions to the Unemployment Insurance Fund (Clause 4, Article 3 of the 2013 Employment Law).

2Eligibility for Unemployment Insurance

Eligibility for Unemployment Insurance

Workers with fixed-term labor contracts of three months or longer across all organizations and entities (regardless of the number of employees) are eligible.

If a worker has signed labor contracts with multiple companies, the first company is responsible for their unemployment insurance (subsequent companies are responsible if the initial contract ends).

Within 30 days from the effective date of the labor contract, the company must complete the unemployment insurance enrollment process for the worker.

3Unemployment Insurance Contributions

Unemployment Insurance Contributions

According to Clause 1, Article 14 of Decision 595/QD-BHXH:

Workers contribute 1% of their monthly salary.

Employers contribute 1% of the total monthly salary of their enrolled employees.

The salary used for calculation is the contracted income, excluding bonuses, overtime pay, and allowances provided by the employer.

4Conditions for Receiving Unemployment Insurance

Conditions for Receiving Unemployment Insurance

Workers are eligible to receive unemployment insurance benefits if they meet the following conditions:

Termination of employment or labor contract, except in cases where the worker unilaterally terminates the contract, the contract is terminated illegally, or the worker is receiving retirement or permanent disability benefits.

Having contributed to unemployment insurance for at least 12 months within the last 24 months prior to the termination of a fixed-term or indefinite-term labor contract.

Having contributed to unemployment insurance for at least 12 months within the last 36 months prior to the termination of a seasonal or fixed-term labor contract of at least three months but less than 12 months.

Submitting the application for unemployment benefits to the employment service center within three months from the date of termination of the labor contract.

Remaining unemployed after 15 days from the date of submitting the application for unemployment insurance benefits, except in the following cases:

  • Performance of military or police service;
  • Enrollment in full-time education or training for at least 12 months;
  • Compliance with a decision to be admitted to a reform school, compulsory education establishment, or compulsory drug treatment center;
  • Being detained, serving a prison sentence;
  • Emigrating; working abroad under a contract;
  • Death of the worker.

5Unemployment Insurance Benefits

The unemployment benefit amount for workers is calculated as follows:

Monthly unemployment benefit = Average monthly salary of the last 6 consecutive months with unemployment insurance contributions x 60%

The monthly unemployment benefit is 60% of the average monthly salary of the last 6 consecutive months with unemployment insurance contributions, but not exceeding five times the basic salary for workers subject to the state-regulated salary scheme or not exceeding five times the regional minimum wage as stipulated in the Labor Code for workers whose unemployment insurance contributions are based on a salary determined by the employer at the time of termination of the labor contract.

6Unemployment Insurance Claim Process

Unemployment Insurance Claim Process

To receive unemployment benefits, workers need to prepare the following documents:

  • Application form for unemployment benefits (standard format).
  • Original or certified copy of one of the documents confirming the termination of the labor contract.
  • Social insurance book. When receiving unemployment benefits, workers need to present their original ID card/citizen identification card + household registration book/temporary residence book for verification.

This article provides basic information about the conditions, benefit amounts, and procedures for receiving unemployment insurance, empowering workers to know and protect their rights.

Frequently asked questions

Unemployment Insurance is a government-provided benefit that offers temporary financial assistance to individuals who have lost their jobs through no fault of their own. It is designed to provide a safety net during periods of unemployment, helping individuals meet their basic needs while they search for new employment.

The conditions for receiving Unemployment Insurance benefits vary by state, but some common changes in 2021 include: expanded eligibility criteria, increased benefit amounts, and extended benefit durations. Additionally, many states have introduced new programs or expanded existing ones to provide assistance to a wider range of individuals, including those who are self-employed, gig workers, and part-time employees.

Eligibility requirements vary by state, but generally, you must have become unemployed through no fault of your own (such as due to a layoff or business closure) and meet certain work and wage requirements. You must also be actively seeking new employment and able and available to work.

The amount of Unemployment Insurance benefits you can receive depends on your previous earnings, the state you live in, and other factors. Each state sets its own benefit amounts, which are typically calculated as a percentage of your average weekly wage up to a maximum amount. In 2021, many states have increased their benefit amounts to provide additional support during the COVID-19 pandemic.

The duration of Unemployment Insurance benefits also varies by state, but it is typically limited to a certain number of weeks. In response to the pandemic, many states have extended the duration of benefits to provide longer-term support to individuals who are unemployed. Additionally, the federal government has provided additional weeks of benefits through various relief packages.

The application process may vary depending on your state, but you will generally need to provide information about your work history, earnings, and the reason for your unemployment. Many states have streamlined their application processes to make it easier for individuals to apply and receive benefits during the pandemic, including offering online applications and providing additional support for those who need assistance.

You can find more information about Unemployment Insurance benefits, including specific details for your state, on the website of your state’s unemployment insurance agency. You can also apply for benefits through this website or by contacting your state’s unemployment insurance office.
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