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This 38 message thread spans 2 pages: 38 ( [1] 2 > >     
NY Suspends Unemployment Benefits to Blogger who Earned $30/ month
NY State Doesn't Know How to Classify AdSense Income

 2:52 am on Oct 9, 2009 (gmt 0)

Since I am a grant consultant it really shouldn't surprise me when our government does something - I'll put politely - "interesting"!

I would LOVE to post a link to this article but bar that I'll give you the basic details.

A lawyer who is out of work and collecting unemployment has now had their unemployment cancelled because it was found out that the lawyer was making roughly $1 a day with the Adsense program.

Apparently this is new ground for the state of New York (where the lawyer resides). It seems that they can't decide whether the Adsense money earned is either income or residual.

Now making around $1 a day comes out to $30 a month - and that's enough to get your unemployment benefits cancelled in New York?

Would love to hear what you-all think of this?



 3:52 am on Oct 9, 2009 (gmt 0)

It would make a lot more sense to simply deduct the amount from their next unemployment check.

If unemployment insurance completely penalizes people for miscellaneous small earnings, instead of making common-sense adjustments, that would create a strong disincentive for benefit recipients to do anything productive.


 4:13 am on Oct 10, 2009 (gmt 0)

Here's a link to the original story in Forbes [forbes.com]. The New York State Department of Labor is unsure of how to classify AdSense earnings and are investigating. Therefore they have suspended unemployment benefits until they determine whether or not the blogger is eligible.

Several phone calls by Forbes to the Department of Labor failed to yield a clear response as to whether New York State regards Google AdSense payments as residual or self-employment income. Such payments are "uncharted territory" and questions of eligibility are "very case specific," according to a DOL spokesman.

New York State has informed Karin that she is ineligible for unemployment benefits while its investigation is ongoing.

You have to read the article to get an idea of how confusing the situation is. The blogger called several times and received wildly different opinions each occasion. The state of New York does not know whether the blogger is eligible for unemployment benefits so they cannot pay her until they first determine her eligibility for benefits. One would think that somewhere within that bureaucracy someone with common sense would step in and take ownership of the issue and approve it as common sense dictates it should.


 9:15 am on Oct 10, 2009 (gmt 0)

do they have a minumum wage in the states? surely they can't class it as a job if it falls so wildly below the minimum wage.
maybe they should order google to up his earnings.


 10:49 am on Oct 10, 2009 (gmt 0)

But there's no minimum wage for self-employment or residual income.

Apparently, self-employment income has to be reported, and will reduce your unemployment benefits, while residual income doesn't even have to be reported.

So while they debate whether she should get full unemployment benefits or reduced benefits, she gets zero.

Talk about disincentive to work, and disincentive to be honest!


 3:32 pm on Oct 10, 2009 (gmt 0)

Wait a minute... Is that NY specific regarding residual income not being required to report as income? All my income is residual, and I report it every year!

Please tell me about this residual income rule... I'm very interested.


 8:15 pm on Oct 10, 2009 (gmt 0)

In Canada they deduct any income earned during the month from your monthly unemployment check.

If I understand this correctly, in NY state, if you have any kind of income they wil cancel your unemployment benefits? Even if you generate only one 2 cent click for the month?


 9:29 pm on Oct 10, 2009 (gmt 0)

Even if you generate only one 2 cent click for the month?

No because the person has to receive a check. In this situation the problem didn't begin until the check was received.


 11:10 pm on Oct 10, 2009 (gmt 0)

No because the person has to receive a check. In this situation the problem didn't begin until the check was received.

Oh I see. So he reached the minimum $100 threshold by earning $30/month over 4 months and received a check for $120. Lucky for him Google doesn't send out checks under $100 or else his unemployment checks would have stopped coming months a go.


 11:21 pm on Oct 10, 2009 (gmt 0)

Well since I'm the one that made the original post I'm glad to say that a lot of the subsequent replies have answered some questions that I had - except one really - why does $30 a month constitute taking away one's benefits - I do understand that its under reveiw and no final decision has been made yet.

I do know that you have to report ALL income (as long as its not under a certain amount) and that does include residual income as well - ie royalties, etc....


 2:07 am on Oct 11, 2009 (gmt 0)

How that income is classified is how Google reports it, and what form is used to report it at the end of the year.


 2:45 am on Oct 11, 2009 (gmt 0)

What's interesting is that her blog was featured in this article that is getting picked up by many news outlets. Now her blog is probably getting tons of traffic, more ads are clicked and she probably would now be considered legitimately ineligible for benefits.


 2:50 am on Oct 11, 2009 (gmt 0)

Now her blog is probably getting tons of traffic, more ads are clicked...

She pulled the ads from the blog. Here's a link to the original story in Forbes [forbes.com] where it is mentioned that she pulled AdSense from her blog.


 4:30 am on Oct 11, 2009 (gmt 0)

why does $30 a month constitute taking away one's benefits

I would guess that's because according to the law, she's now working and collecting income. I am not familiar with NY state laws so can't comment any further. I do know Canadian law and as I stated earlier, they deduct whatever earnings you received for the month from your unemployment check. If you earned more than your unemployment check, only then will you get nothing. But that's Canada. We pay a little higher taxes so that those who need help, be it healthcare or unemployment benefits, get it. I'm sure any Canadian reading this story finds it ridiculous.


 5:20 am on Oct 11, 2009 (gmt 0)

why does $30 a month constitute taking away one's benefits... I do understand that its under reveiw and no final decision has been made yet.

Right, you answered your own question. Earning $30/month does not result in the removal of benefits. According to the article in Forbes [forbes.com], the check is reduced by 25%. And as you mentioned, the reason her benefits are suspended is not because she earned $30/month but because her eligibility for benefits are under review.


 7:12 am on Oct 11, 2009 (gmt 0)

This is a wake up call for more than the unemployed, anyone on any form of state or federal assistance of any kind, especially those claiming disability benefits, should chuck AdSense right away.

The whole problem with AdSense is technically it constitutes "WORK" as you have to work on your website to generate money.

When you're receiving benefits claiming you're unemployed or otherwise incapable of working, AdSense proves otherwise because you're plainly working at a vocation.

Working at something doesn't mean success, nor does it mean above poverty, work simply means work.

Some will cry "I'm not working, I'm just blogging." and I can point out bloggers that make thousands or more per month, they used to be called "columnists" before newspapers started to go extinct.

AdSense, at least by the definition of how many of us use it, constitutes self-employment, therefore any agency aware of people like us using AdSense as a business may incorrectly think that any unemployment claims from an AdSense publisher could be argued null and void.


In the first place you've declared yourself a "PUBLISHER", which is a vocation, and AdSense is paying you monthly as you execute that vocation.

Just because you're earning below the poverty level is a meaningless measure as many new business owners also operate at a loss in the first 6 months to a year, which is also technically below the poverty level.

The problem is you can't easily differentiate between the new restaurant venture bleeding cash vs. the new online blogger venture that's just ramping up but currently only makes a mere pittance because it has just as much potential to earn as any high earning site.

At the end of the day, the owner of both businesses is losing money or making next to none, simple as that.

To be fair, many AdSensers make many hundreds or thousands of dollars PER DAY which is a totally viable self-employment income and the bureaucrats have no reason to think this publisher (aka blogger) couldn't equally do as well.

My suggestion would be for anyone getting gov. assistance of any kind to avoid AdSense, affiliates, etc. until this is all sorted out because it's easier for them just to cut you off altogether and you may not be able to get back into the program again, EVER.

Is it worth the risk of losing benefits just for a little extra beer and cigarette money?


 11:30 am on Oct 11, 2009 (gmt 0)

Also, just to attempt to clarify something: I think some people are confusing income that's reportable to the IRS for tax purposes (pretty much all of it -- check the IRS definition of "income"), vs income that's reportable to the NY State Department of Labor as income that affects your eligibility for unemployment.

I got the distinct impression from the original article that the DoL considers self-employment income but not residual income in determining your eligibility for unemployment. They operate under their own rules, which do not necessarily parallel those of the IRS.


 3:46 pm on Oct 11, 2009 (gmt 0)

I've always planned to use Adsense income + NYS unemployment to cover my bills temporarily in case I lost my main job.

My sites are not blogs & don't get updated daily or sometimes even weekly. Wonder if this is considered residual income? What if you put the Adsense checks on hold until the unemployment runs out?


 5:18 pm on Oct 11, 2009 (gmt 0)

It can happen anywhere.. I know in PA you can get screwed when you file your tax forms from google if you show revenue during unemployment. There is however a partial unemployment that allows you to get some of your payments while you work part time or start a business.

*Edit* when i was laid off part of the unemployment process was to state any and all forms of revenue/alimony/payments so on and so forth


 5:48 pm on Oct 11, 2009 (gmt 0)

Technicalities aside, I cannot contain the laughter I'm crying over the irony of of an out of work laywer, unemployment benefits, and $30 of adSense earnings (apologies to lawyers who may be reading, but I've only been on the nasty end of the sticks carried by attorneys.)


 6:10 pm on Oct 11, 2009 (gmt 0)

FWIW, I fought the NY DOL on exactly this issue and won, and I was (and am) earning considerably more than this on my site.

Last year, during a period of unemployment, the DOL had a look at my site and decided that the ads were evidence that I was self-employed, and they stopped paying me.

I appealed this decision to an administrative law judge, who agreed with my argument that my site was part of my way of making my name known in my field and that it would have been counter-productive for me to take it down when unemployed, and that the income I earned from it was like income from a billboard on the side of my house...

The DOL has at least one precedent, then, if they are really interested in sorting out this issue. I'm not sure they are. I think there some push within the department to find reasons to deny benefits so as to reduce their payouts.

It is also clear to me from this experience that the DOL staff are pretty clueless about the Internet in general. The DOL staffer who spoke against me at my hearing attempted to introduce pages from various sites, and other irrelevant information. The judge was not impressed.

(Also, have to agree with IB that it probably is very difficult to distinguish someone setting up a business (and therefore ineligible for benefits) from someone who just has a site, though in my case I had the history to prove that I was in the "personal site" category.)

Please do not PM me for more details. That's all I'm saying. If someone reading this has a connection to the person caught up in this case, and wants to pass on the info. I've posted, that's fine.


 12:42 pm on Oct 12, 2009 (gmt 0)

I've always wondered how much money you need to earn from adsense before its considered an income, though I suppose it would depend on where you live. I would have said that declaring that you are earning a total of $1 a day really is waste of admin resource, likely to cost more than $1 a day to administrate.


 3:41 pm on Oct 12, 2009 (gmt 0)

Since when does the government pay unemployment to the purely self-employed? If you're not setting up a corporation or similar entity, hiring yourself as an employee and paying UI for yourself, what states will let you make a claim if your venture folds?

I personally think that the state should regard it as a good thing that some people who are on UI become entrepreneurial. As long as they're willing to accept any full-time work that comes along, I would argue that it's actually better for the state to encourage people to innovate and explore entrepreneurship and self-employment as an alternative to traditional employment.


 3:46 pm on Oct 12, 2009 (gmt 0)

Seb7, considering that you are in the US, anything above $600 will be reported to the IRS by whoever gives it to you. In any case, you are required to report all income to the IRS and pay taxes on it. If a regular person person who files taxes will simply add their annual AdSense income to the taxes. As a six-figure Adsense publisher, that is what we do for Linkshare, Amazon, Commission Junction, etc. income that is really just a few hundred bucks a year.


 3:48 pm on Oct 12, 2009 (gmt 0)

NY would probably be able to cancel unemployment for a lot more people if they retracted their "Affiliate Tax" law.


 6:11 pm on Oct 12, 2009 (gmt 0)

"Since when does the government pay unemployment to the purely self-employed?"

They don't. NY DOL (and I imagine other states) disqualifies someone from receiving unemployment benefits after being laid off from a full-time job if in their judgment that person is actually self-employed.

If you've been self-employed full-time and run out of work, you do not qualify for any benefits. Unemployment insurance protects employees only....


 9:31 pm on Oct 12, 2009 (gmt 0)

NY Suspends Unemployment Benefits to Blogger who Earned $30/ month
I have no idea and did not learnt international finance/economical laws, but how can 1$ a day get calculated even to one persons daily expenditure ?
(Atleast in my country I can eat properly in 1$ unsure about NY though, if they can afford a 24 hour meal in 1$)

** I have only read 1st message of this article for my comments made.


 1:34 am on Oct 13, 2009 (gmt 0)

In New Jersey it is possible to collect something akin to unemployment (for those eligible) while trying to start your own business. The state recognizes that not all laid off workers are seeking employment, but may want to take an entrepreneurial path.

The Self-Employment Assistance (SEA) program assists qualified unemployed individuals in becoming self-employed and starting a business in New Jersey.

[lwd.dol.state.nj.us ]

I believe there are other states that offer this, as well. A quick Googling seems to indicate, ironically, that New York is one such state.


 7:46 pm on Oct 14, 2009 (gmt 0)

System: The following message was spliced on to this thread from: http://www.webmasterworld.com/google_adsense/4007091.htm [webmasterworld.com] by martinibuster - 11:52 am on Oct. 14, 2009 (utc -8)

Over on TechCrunch today there was a post with the above title, and the below statement:

"Not only does Google AdSense pay badly, it can wreck your unemployment benefits. The State of New York cut one woman's benefit checks and told her running the ads was "self employment." AdSense earned her $1.30 per day."

Be advised if you're doing even a tiny bit of AdSense on the side...


 12:57 pm on Oct 22, 2009 (gmt 0)

I smell a book deal.

This 38 message thread spans 2 pages: 38 ( [1] 2 > >
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