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What to Know About Unemployment as a Freelancer?

Elizabeth
June 13, 2020

According to some financial projections, the pandemic is expected to cause the unemployment rate to rise as high as 30% in the second quarter of 2020. And, as the economic situation in the United States (and all over the world) begins to worsen, the government has taken to bulking up certain unemployment benefits.


A record 6.6 million people filed for unemployment last week due to job losses as a result of company-wide shutdowns and closures due to coronavirus. Even though the government is providing a lot of aid to citizens during this crisis, there are a few people who are getting left out of the coverage: freelancers.


Can you file for unemployment as a freelancer? Do the expanded unemployment benefits apply to those who are self-employed? We’ll answer your questions to give you a better idea of what to expect moving forward.

Can You File for Unemployment as a Freelancer?

Usually, no. Unlike W-2 employees, freelancers, independent workers and those who are operating as a sole proprietor don’t receive the same benefits of unemployment. However, during these unprecedented times, the United States government has decided to extend the unemployment benefits to cover self-employed and gig workers.


Pandemic unemployment benefits are cropping up all over the country at a national and state level to assist workers who are unable to perform their normal freelance jobs during this time. This also includes gig workers who work for companies such as Uber and Door Dash.


What’s important to understand about unemployment and being a freelance worker is that you’ll have to contact your state to inquire about and apply for these benefits. While the federal government sets the requirements, each state handles its own applications and ultimately determines who is eligible for coverage.

Navigating Financial Hardships as a Freelancer

Working full-time for yourself is great until it’s not. And, nobody could have predicted that 2020 would go this way, especially those who live on a project-to-project basis. If lockdowns and closures have made it impossible for you to continue to work as a freelancer, you have options when it comes to navigating these financial hardships.

Pandemic Unemployment Assistance Act

Through this new act, qualified unemployed workers of any kind can receive financial assistance due to hardships experienced because of coronavirus. The definition of “qualified unemployed workers” has been extended here to include self-employed workers, independent contractors (i.e. freelancers), and even workers with a very limited work history.


Through the Pandemic Unemployment Assistance Act, workers who don’t normally qualify for unemployment benefits will be eligible to receive pandemic unemployment compensation, which is a $600 per week payment, on top of regular unemployment benefits, through the end of July 2020 (currently).

Families First Coronavirus Response Act

The Families First Coronavirus Response Act is giving out tax credits to self-employed and freelance workers who are out of work because of a positive diagnosis of COVID-19, who are responsibly self-isolating or who must self-quarantine due to the positive diagnosis of someone they’ve come in contact with. 


In broad terms, the act provides citizens with free coronavirus testing, establishes paid leave, enhances unemployment insurance, expands food security initiatives, and increases federal Medicaid funding. So, even as a freelancer, you can reap the benefits of this type of government assistance.


You will qualify for a tax credit of up to two weeks of sick pay at your average pay and 12 weeks of family leave pay at two-thirds your normal rate.

Self-Employment Assistance Program

Whether you worked for a company as a 1099 independent contractor or are self-employed due to the fact that you own and operate your own small business, you’re eligible to receive help through the Self-Employment Assistance Program.


Instead of offering workers regular unemployment insurance benefits, this act gives independent or displaced workers an allowance of sorts. The US Department of Labor notes that, through this program, “states can pay a SEA allowance, instead of regular unemployment insurance benefits, to help unemployed workers while they are establishing businesses and becoming self-employed. Participants receive weekly allowances while they are getting their businesses off the ground.”

Navigating Unemployment Savings

There’s no denying the fact that this pandemic took everyone by surprise. You are, however, not alone in this. Nearly every country in the world is working around the clock to safeguard workers from this crisis, and that includes freelancers and independent contractors as well. 


However, there are measures you yourself can take in learning how to navigate unemployment and bulk up your savings. One solution? Paying for bills and other essentials with a debit card that’s optimized to earn you money.


Cheese Debit Card: for every dollar you spend, you can save by getting cash back. The more you spend, the more savings you get. The card is 100% free and FDIC-insured. Sounds great, doesn’t it? Join to start saving more

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