Valid Reasons to Cancel an Unemployment Claim

The most obvious reason for claimants to cancel their unemployment insurance (UI) benefits is because they’ve found a new job. They can also cancel their benefits if they discover an error on their part or on the part of their state's unemployment department. Doing this may save them the trouble of possibly facing fraud charges down the road and having to return the money.

Unemployment insurance benefits are for people who have lost their jobs through no fault of their own; this often happens due to layoffs, a reduction in force or lack of suitable work. When a claimant applies for UI, a state agency will assess their eligibility for benefits by looking at a specific base period before they lost their job. The base period does not usually count the last few months of employment just before a person applies for benefits.

In light of this, most states look at the claimant’s last four calendar quarters. States may also require that a claimant make a certain amount in earnings, based on a flat dollar amount or their highest quarter wages.

People who quit or lost work due to firing are usually not eligible for UI benefits. However, there are exceptions for those who lost work in certain circumstances where there is good cause for severing ties between an employee and employer. The state unemployment agency looks at all the circumstances of an applicant’s claim to determine what their weekly benefit amount will be and how long they will receive unemployment compensation benefits while looking for a new job.

According to CNBC, claimants certify their claims and document their work search to receive weekly or biweekly benefits by reporting any income and work hours they may have earned during that time. The UI agency then assesses those figures to determine if, and how much, the claimant will receive to cover that week. If they earn too much, they won't get any benefits; if they worked only a few part-time hours and made little money, they’ll get some benefits, but not as much as they would have had they not worked at all during that claim period.

A claimant who goes back to full-time employment may or may not have to actively cancel their unemployment insurance claim, depending on the state they are in. Claimants should check with their state agency for the specific process they must follow when going back to work. In some states, they will merely stop certifying. In others, like California, they check off a box when they certify stating they no longer need to claim benefits. Every state considers collecting UI benefits while working full-time fraud – not only will an offender have to repay the money, but they may also face criminal charges.

Claimants who discover overpayments or errors in their UI benefits should also report them immediately. In some instances the claimant makes the mistake and at other times, the agency is in error. If the unemployed person notices something is off, it is in their best interest to report it or cancel their existing claim. The exact process depends on the state where they collect benefits.

At the beginning of the coronavirus pandemic in March 2020, benefits were rushed out as millions lost their jobs overnight. The federal government also initiated the Coronavirus Aid, Relief, and Economic Security Act (CARES) Act to allow people who wouldn’t normally get benefits, such as independent contractors or the self-employed, to receive them. According to ProPublica, some agencies paid people by mistake, and many states now want the money returned. Claimants won’t always notice these errors, but if they do, reporting them immediately or cancelling their benefits will save them money and pain in the long run.