The number of families who are unprepared to cover a $400 emergency has been growing steadily in the last few years. According to a 2016 Federal Reserve annual economic report, that number may reach soon reach fifty percent. Financial hardship has become a constant threat to the economic well being of many low-income families nationwide.
There are several ways low-income families and prepare, and eventually sail through financial hardship. In this article, we list and explain the four most effective ways families can rid out temporary financial hardship, including applying for unemployment benefits and temporary financial assistance.
Apply for Unemployment Benefits
Working adults who lose or quit their jobs have access to unemployment benefits provided by the federal government. Such benefits are available in all fifty states, as well as the District of Columbia, Puerto Rico and the U.S. Virgin Islands. Unemployment benefits are managed in each state by a local unemployment insurance program, which determines who and how much money can be awarded each month. In general, the amount of money provided through unemployment benefits will vary according to state. In high-income states such as Massachusetts, eligible workers can receive up to $800 per month in unemployment benefits. In Mississippi, however, eligible workers often receive around $300 per month.
Unemployment insurance programs are managed by state governments, who are responsible for processing applications and paying eligible workers. The money comes from state and federal payroll taxes paid by local residents who are employed. In general, unemployment benefits are only available to workers who have become unemployed through no fault of their own. Workers who were fired for misconduct are not eligible for the program. Many states consider behavior outside of work, such as committing a crime, as a valid reason not to award unemployment benefits. How long will people remain ineligible varies by state, with some banning workers permanently from qualifying for the service after being fired for misconduct. Also, employees who quit their job without good cause are also not eligible.
Unemployment benefits are classified as a type of financial assistance or social welfare benefit. As a result, beneficiaries must add any money received through unemployment benefits to their gross income when filing their tax returns, applying for a mortgage or unsecured loan. Unemployment benefits last for six months after being approved, with the option to renew it several times if the requirements are still met. Interested parties are advised to contact their local unemployment insurance agency to find more information about how to apply and how much money is available.
Apply for Self-Employment Assistant
The Self-Employment Assistance Program, or SEAP, is a program operated by the federal government that helps unemployed people create new businesses and job opportunities through self-employment. The SEAP program is a good solution to workers who wish to start their own business while maintaining their unemployment benefits. It also provides entrepreneurial training, counseling and other resources that help first-time business owners successfully kick-start their enterprises.
To be eligible for self-employment assistance, people must first meet the requirements for regular unemployment benefits. Eligible workers will then be asked to enroll in a training program that has been approved by the Employment Security Department. These training programs are known as Commissioner-Approved Training, or CAT, and are only available to people who receive unemployment benefits. By enrolling in a CAT program, workers guarantee that their benefits will not be suspended. Also, any money people earn from their business will not be deducted from their unemployment benefit.
As of 2019, SEAP includes training programs in entrepreneurship, business counseling and technical assistance. Other training programs help people set up a business and become self-employed. To enroll in any of those programs, eligible workers must submit an online application or visit their local WorkSource office. Then, they must contact a SEAP approved provider and confirm eligibility for their chosen program. Some providers have additional income requirements that workers must meet before being allowed to enroll. People can find out more about any additional eligibility requirements by visiting the training provider’s website.
Get Help for Your Food Expenses
Covering food expenses is among the top priorities for families going through financial hardship. To help alleviate this problem, the federal government operates the Supplemental Nutrition Assistance Program or SNAP. This financial assistance program provides assistance for low-income families to purchase food and other household supplies. As of 2019, more than 44 million Americans receive at least $100 a month from SNAP.
To receive financial assistance from SNAP, families must meet certain income requirements. First, their annual gross income must be at or below 130 percent of the Federal Poverty Level, which in 2019 equaled $27,640 for a three-member family. However, families that include a senior member or a person with disabilities are excluded from this requirement. Money received from other assistance programs such as unemployment benefits or Medicare does not count toward the income requirement.
In addition to income requirements, qualifying families must not have more than $2,250 in assets. This number is raised to $3,500 if the family includes an elderly or disabled person. However, it does not include the value of their home, one vehicle, and other assets that the federal government has exonerated such as household goods and personal effects.
Low-income families that meet the required criteria can submit an application to the local SNAP office. The application can be submitted online, by mail or in person. when submitting an application, households must provide documents that can certify their eligibility to the program, such as proof of income or employment.
Welfare or Temporary Assistance for Needy Families (TANF)
Families and individuals who need further financial support can receive help through the Temporary Assistance for Needy Families, or TANF. This program is administered by the U.S. Department of Health and Human Services, or HHS, and provides cash assistance to families who fall into financial hardship. However, this benefit is only available to families with children, and in cases where both the parents and other close relatives are unable to cover the family’s basic needs.
TANF benefits, most commonly known as welfare, are time limited. Families can receive the benefit for no more than two consecutive years, and no more than five years during their lifetimes. Recipients must find work within two years of first receiving aid. They must also participate in work activities for a minimum number of hours to remain eligible for the program. Two-parent families must work 35 to 55 hours per week, while single parents only need to complete 30 work hours to stay in the program.
Money received through welfare can be used to cover basic expenses, such as buying food, household supplies or paying bills. On average, a family of three (two parents and one child) receives $450 through the program. However, some low-income states provide as low as $300. To receive those benefits, families must also meet some additional requirements. For example, all family members must be U.S. citizen and their children must be younger than 18 years old. Any children between ages 6 and 17 who have not graduated from high school must attend school.
There are some income-related requirements too. A family of three, for example, must not have a monthly gross income above $750 and countable assets above $1,000. Each state is given broad authority to expand or reduce TANF requirements so that they adapt to the local population. Interested parties should contact their local government benefits office for more information on the process.