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Unemployment Insurance - Calculation of the Benefit Credit and Benefit Rate - Massachusetts

A worker's UI benefits are calculated as outlined below:

Once a claim has been established, a Benefit Credit must be calculated. The Benefit Credit is the total amount of benefits an individual may potentially collect during the 52 weeks following the effective date of the claim.

A Benefit Rate–the amount of weekly benefits to be collected–is also calculated. Earnings from all employers for the two highest income quarters in the Base Period are added, and the total is divided by 26 (the number of weeks in two quarters) to arrive at an average weekly wage. For a worker with two or fewer quarters of wages, the amount earned in the highest single quarter is divided by 13 to establish the average weekly wage. Your weekly Benefit Rate is half your average weekly wage, up to the current maximum rate.

The current maximum benefit rate is $512 a week. There is also a $25 a week dependency allowance for each dependent child. The amount of your dependency allowance cannot be more than 50 percent of your benefit rate, no matter how many dependent children you have.

A new maximum rate is calculated annually. The new rate becomes effective for new claims filed after the first Sunday in October. Only claimants who file after that date are eligible for the revised rate.

The total Benefit Credit is capped at the lesser of either 30 times the weekly Benefit Rate or 36% of total Base Period earnings.

Certain dependency allowances and pension-related deductions may also apply.

The duration of UI benefits is the maximum number of weeks a claimant is eligible to collect benefits, and is determined by dividing the Benefit Rate into the Benefit Credit. The maximum number of weeks a claimant can collect full benefits is 30 weeks.

Example

Step 1: Calculating Your Average Weekly Wage

The two quarters in your base period in which you were paid the highest wages are added together, then divided by 26 (the number of weeks in two quarters) to determine your average weekly wage.

Example: Earnings for four quarters:

1st Quarter: $4500

2nd Quarter: $5000

3d Quarter: $4500

4th Quarter: $8000

Total: $22,000

The quarters with the highest wages paid are the 2nd and 4th quarters for a total of $13,000. When this amount is divided by 26, the average weekly wage is $500.

Step 2: Calculating Your Benefit Rate

Your average weekly wage is divided in half. This is your "benefit rate."

Example: $500 average weekly wage divided by two = $250.

Step 3: Calculating Your Benefit Credit

The total amount of benefits you can receive in your benefit year is called your "benefit credit" and is the lesser of two amounts, either:

·   30 times your weekly benefit rate, or

·   36 percent of the total earnings in your base period.

Example:

·   30 X $250 = $7500, or

·   36% X $22,000 = $ 7920

In this example the benefit credit would be $7500

Step 4: Calculating Your Duration of Benefits

The duration of benefits is calculated by dividing your benefit rate into the total amount of benefits you may be eligible to collect.

Example: $7500 divided by $250 = 30 weeks

See also:

Unemployment Insurance - Eligibility for Partial Benefits - Massachusetts

Unemployment Insurance - Application Procedures and Issuance of Benefits - Massachusetts

Unemployment Insurance - Overview - Massachusetts

Source

http://www.detma.org/WSUICalculations.htm

Additional information for this topic was drawn from the DETMA publication Simplifying the Employment and Training Law: A Guide for Employers. It is available in PDF format (requires Adobe Acrobat Reader) from the Division of Career Services/Division of Unemployment Assistance (formerly Department of Education and Training) website at:
http://www.detma.org/pdf/smpbook2.pdf

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