Fact Sheet

Unemployment insurance improvements, recovery rebates will help Alabamians hurt by COVID-19 pandemic

The coronavirus pandemic has caused an unprecedented increase in unemployment insurance claims nationally. And the story is the same in Alabama, where 74,056 UI claims were filed in the week ending Saturday, March 28. That’s easily a record high since 1987, the earliest year for which weekly data is available for Alabama. The number of claims likely will continue to increase quickly in the coming weeks.

The pandemic has highlighted the need for Alabama to lift harmful UI cuts and barriers that lawmakers erected last year. In the meantime, three types of state and federal payments can help Alabamians who have lost their jobs or have working hours reduced because of the pandemic. They are traditional unemployment insurance (UI), Pandemic Unemployment Assistance and recovery rebates.

Unemployment insurance (UI)

This program provides financial support for qualifying Alabamians who lose their jobs or suffer a reduction in hours through no fault of their own. The weekly payments range from $45 to $275, based on earnings in roughly the past year and a half. That’s well below the nationwide median of $366 per week.

Alabama’s UI system is stressed by new claims because of recent massive layoffs. Many applicants have experienced long delays in accessing the website and phone lines to apply for benefits. As in other states, Alabama’s UI system wasn’t ready for a rapid, unprecedented flood of new applicants. But that’s no reason to delay a UI application if you’ve lost your job. You can click here to apply for UI benefits in Alabama.

To file unemployment compensation claims, visit or call 1-866-234-5382.

The Alabama Department of Labor (DOL) has taken some important steps to ease UI access during the pandemic. The DOL has waived its usual requirements for job searches and a one-week waiting period before benefits begin. Employers also will not be penalized with an increased UI tax rate based on high amounts of paid benefits for now. This removes a motivation for employers to dispute an employee’s claim for benefits.

Even Alabama’s maximum UI benefit amount is insufficient to secure the basic needs of many people. Fortunately, new federal legislation enacted Friday will help jobless workers fill that gap for the next few months. The Coronavirus Aid, Relief and Economic Security (CARES) Act will allow Alabama to provide an additional 13 weeks of federally funded UI benefits. The CARES Act also will supplement state benefits by providing a federally funded $600 weekly benefit increase through July 31.

Pandemic Unemployment Assistance (PUA)

This new federal program provides benefits to many people who lost their jobs amid the pandemic but don’t qualify for traditional UI benefits. Participants can receive up to 39 weeks of PUA benefits. Eligible people include:

  • Self-employed people
  • People who haven’t been working long enough to qualify for UI
  • Contract workers and gig workers
  • People who have exhausted regular UI benefits
  • People whose workplaces closed because of COVID-19
  • Caretakers of people sick with COVID-19

PUA participants will receive half of the average weekly regular UI benefit in Alabama. They are also eligible for the federally funded $600 weekly benefit increase available to beneficiaries of regular UI. Federal and state agencies are still working to implement guidelines for the new program.

Recovery rebates

These benefits are refundable, one-time federal payments. The money will not count as federal taxable income. Here are some key facts:

    • The full rebate amounts are $1,200 for single adults and married couples who file taxes separately, and $2,400 for married couples filing jointly.
    • Families also will receive an additional $500 per dependent child under age 17. The $500 payment is unavailable for older dependents like college students, seniors or adults with disabilities.
    • Rebates will be paid in full to individuals making up to $75,000 per year and couples making up to $150,000 per year. These rebates are available to individuals or households who filed a tax return in either 2018 or 2019. Millions of Americans with extremely low incomes likely will have to file a return to receive the rebate.
    • The rebate phases down gradually for individuals who reported more than $75,000 in annual income and for couples who reported more than $150,000 in annual income. Payments will be unavailable to individuals with annual incomes of more than $99,000 and couples with annual incomes of more than $198,000.
    • Payments will arrive via direct deposit for those who have given the IRS their deposit information. Others will receive a check.

State changes to unemployment insurance still needed

UI benefit increases and removal of barriers are good first steps toward ensuring state and federal governments mitigate the economic consequences of COVID-19 as much as possible. The Alabama DOL’s response to the CARES Act has been quick and thorough. But the state still needs to take bold action in other areas to blunt the damage the pandemic will do to the economic health of the people of Alabama.

State lawmakers should build on the federal UI improvements in the CARES Act by undoing recent harmful policy changes. Alabama’s UI system offers fewer weeks of coverage than most other states because of a 2019 law sponsored by Sen. Arthur Orr, R-Decatur.

Orr’s measure reduced the maximum number of weeks an Alabamian could claim UI benefits from 26 – the standard in most states – to somewhere between 14 and 20, depending on the unemployment rate. It conditioned five additional weeks of benefits on participation in job training programs, some of which are now shut down because of COVID-19.

The 2019 law tied the maximum number of benefit weeks to the unemployment rate. Because Alabama’s published unemployment rates were unusually low recently, the number of benefit weeks is set at the lowest level, 14 weeks. The COVID-19 pandemic shows that published unemployment rates lag behind the reality that tens of thousands of Alabamians experience during crises.

The coronavirus pandemic threatens to trigger economic suffering unlike anything most of us have seen in our lifetimes. Alabama should help jobless workers endure this downturn by boosting weekly UI benefits and removing harmful barriers to unemployment assistance. Repealing the 2019 UI limits and restoring the full 26 weeks of state-funded benefits would be a great start.