The federal government provides unemployment benefits for service members who are leaving the military and who are unable to obtain employment. These benefits are provided through the Unemployment Compensation for Ex-Service Members (UCX) program. While this is a federally funded program paid for by each branch of the military, it is actually implemented by the states through their state unemployment offices.
Eligibility for the UCX Unemployment Program
Eligibility for UCX requires that you served on active duty in the military and were discharged under honorable conditions.
There are no residency requirements under the UCX program. This means you can file for benefits in the state that you live in after discharge even if you didn’t live there before you went into service or at any other time.
When and Where to File for Unemployment Benefits
You should apply for unemployment benefits during the week you are discharged from the military. You can ask for help from the Local Veterans Employment Representative at your state employment office. You will need to provide a copy of your certificate of release or discharge papers (DD-214) to your state employment office. In addition, you will be asked to provide your Social Security card and a resumé that shows your employment history, both civilian and military.
If you need help creating a resumé, you can see the federal government's Job Center Locator to find a One-Stop Career Center near you, or call 877-US-2JOBS or 877-872-5627.
You may be able to apply over the phone, online, or by faxing or mailing in an application form. After your UCX claim is approved, many states require a one-week waiting period before you can begin receiving benefits. This is why it is a good idea to apply as soon as possible.
The Application Process
When you apply for UCX, most states will interview you, meaning ask you questions about your military service and your active duty pay, in order to determine your eligibility for benefits. This interview may occur right when you apply, at a later time, or not at all if your state does not conduct interviews with applicants. You may be asked why you left the military and under what conditions.
The next step will be for the state employment office to reach out to your branch of the military in order to confirm the information you have provided. This is called a verification process and it can take a few weeks or more. Even though you aren’t being paid yet, make sure to file your claim weekly, so that once you are awarded benefits you will receive all of the checks you are eligible for.
How Much Will My Check Be?
Your check will be a percentage of your prior earnings in the military. In most states, you will receive 50% of your prior pay, but the total amount you can receive is limited by state law. This limit varies by state. If your pay was very high, you may receive less than 50% of your active duty pay in order to remain within the state guidelines.
State employment offices will require you to fill out a claim form every week (often you can do so online) to certify that you have been looking for work. Even if you can’t find a job, as many people cannot in this economy, you still have to certify that you are “ready, able, and available” to work if you could find a job.
What if I Am Receiving Retirement Pay?
If you are receiving disability retirement pay or military retirement pay, this will impact the amount of your unemployment check. Your unemployment benefits will be reduced based on the amount of your pay. For every dollar you receive in your retirement pay, your unemployment benefits will be reduced by a dollar. In some cases this will mean that, even though you are technically eligible for unemployment compensation, you won’t receive any after your benefit amount has been reduced by the amount of your retirement pay from the military.
What if I Am Receiving Disability Compensation From the VA?
Disability compensation payments from the VA do not reduce your unemployment check. You can receive your full unemployment compensation along with your full disability payment from the VA.
How Long Will I Receive UCX Benefits?
During normal economic times, benefits are paid for 26 weeks. But during difficult economic times like we are presently experiencing, state governments as well as the federal government provide extensions. There is an Emergency Unemployment Compensation (EUC) program that can extend benefits for up to 99 weeks. You will need to inquire about the length of time at your state employment office to find out how long you are eligible for benefits.
Will My UCX Benefits be Taxed?
Yes, unlike veterans disability compensation, you will be taxed on the amount of funds you receive for unemployment compensation. In most states, taxes won’t be withheld from your check unless you request it, but at tax time, you may be unpleasantly surprised to learn you owe taxes, especially after you get a job and your new earnings bring you to a taxable level.
To avoid this, you can ask to have taxes deducted from your unemployment check, or, after you start working, you can increase the amount of taxes withheld from your paycheck.
Where Can I Find More Information
For more information about unemployment benefits, see Nolo's articles about Collecting Unemployment Benefits.