What to do when unemployment benefits expireWith the U.S. Senate's failure to extend unemployment benefits that expired in June, things have gone from bad to worse for unemployed workers.
By: Eileen Ambrose, The Baltimore Sun
With the U.S. Senate's failure to extend unemployment benefits that expired in June, things have gone from bad to worse for unemployed workers.
On top of that, Congress hasn't restored another recently expired subsidy that has been paying the bulk of health insurance premiums for workers who lost their jobs since September 2008.
Worker advocates have their fingers crossed that federal legislators will have a change of heart, at least for unemployment benefits. But the unemployed shouldn't bank on that given concerns in Congress, particularly among Republicans, that the deficit is getting out of hand and spending must be cut.
(States generally provide benefits for 26 weeks, but federal money has allowed them to extend that for a total of 60 weeks to 99 weeks, depending on the severity of unemployment in each state, says Judy Conti with the National Employment Law Project.)
Roughly four out of 10 unemployed workers nationwide have been without a job for more than six months. If you're among them, you probably have cinched your belt already. Now that more safety nets have been removed, what more can you do?
You likely drew up a budget when you first lost your job; now it's time to "rebudget" to see if you can trim even more, said Ethan Ewing, president of Bills.com, a financial website. "Go super lean," he said.
Explain your situation to creditors and ask for a suspension of payments for a period of time, Ewing said. Make minimum payments on the mortgage or other bills until your finances improve.
Forget a career path right now, and take any job to bring in a paycheck, Ewing said.
Quit smoking, hold garage sales or sell items on eBay. "Anything to generate some extra income," he said.
Tap the equity in your house, if possible. Those 62 or older with more than 50 percent equity in their house should consider a reverse mortgage, Ewing says. You can receive the money in a lump sum, through monthly payments or in a line of credit.
Ask friends and family for loans. Or move in with relatives until you get back on your feet, said Jim Godfrey, president of Consumer Credit Counseling Service of Maryland and Delaware.
Investigate public or nonprofit assistance programs.
Start with 2-1-1 at United Way. Social workers answer the phones and direct consumers to hundreds of public and private programs depending on the need, said Chuck Tildon, vice president of external affairs.
For instance, there's help for those needing temporary housing, prescription drug assistance, and referrals to medical clinics that charge little or no money, he said.
Until recently, Uncle Sam paid 65 percent of the COBRA insurance premium for unemployed workers remaining on a former employer's health plan. This subsidy — good for 15 months — expired at the end of May, so anyone losing a job this month or later is out of luck.
It will be hard for the unemployed to replace this subsidy, said Ron Pollack, executive director of Families USA. The average COBRA premium for a family consumes more than 84 percent of the typical unemployment check, he says.
He recommends that families check out whether their children are eligible for coverage under Medicaid or the Children's Health Insurance Program.
"Very often, children may be eligible if family income is sufficiently low," Pollack said. If so, that would reduce the amount of coverage that parents would have to buy on their own, he says.
Godfrey says people should not be embarrassed about seeking assistance. "That's why these programs were developed," he said.
ABOUT THE WRITER:
Eileen Ambrose is a personal finance columnist at the Baltimore Sun. Send her e-mail at email@example.com. She cannot give individual advice.
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