How to Survive an Unpaid Family Leave of Absence

How to survive unpaid leave

Will you survive an unpaid family leave of absence without accumulating debt and ruining your credit history?

The United States does not provide paid leave. Health insurance plans have cost sharing components and do not cover every conceivable expense. You may have to cope with a deadly one-two punch: a sudden spike in outlays, combined with a loss of income.

Increase your odds of emerging unscathed by researching relevant laws that sometimes provide monetary assistance and job protections, prepare your finances in advance, and make the appropriate adjustments when reality comes knocking at your door.

This is a guest post by Kevin Haney. We hope your enjoy!

Researching Family Leave of Absence Laws

The first step in surviving an unpaid family leave of absence is researching whether any federal or state laws apply to your situation. Do not assume that the government will step in to lend a helping hand. This is a very dangerous because it is rarely true.

A smattering of paid leave programs exists to help a minority. Unpaid job protections are available to a slightly wider segment.

Paid Family Leave Laws

There is no federal paid family leave law in the United States. Only three states provide a program replacing a portion of income when a worker needs to care for a sick household member. California, New Jersey, and Rhode Island allow for six weeks of partial income replacement.

Temporary disability, Social Security, and unemployment compensation help only a very select group of people.

Temporary Disability

Your state probably does not offer temporary disability insurance. Only five states do. They are California, Hawaii, New Jersey, New York, and Rhode Island. If you work in one of these five states, the disabled worker may have partial income replacement for at least six months.

Social Security Disability

Do not count on Social Security Disability either. Social Security does not cover temporary medical conditions, or care for sick household members. You must expect your medical condition to last one year or longer or to result in death in order to qualify.

Collecting Unemployment

Collecting unemployment is not realistic either. If you plan to return to work, you are not eligible for benefits. However, if you permanently lose your job, you may qualify for some temporary assistance.

Twenty-two states allow workers to collect unemployment if they voluntarily quit work for a “compelling reason.” Each state has its own definition. Most include care of a seriously ill household member. Six include an employee’s own disability.

Unpaid Job Protected Leave Laws

Federal and state laws provide unpaid job-protected leave. They provide two sets of benefits for qualified employees working for employers subject to the regulation.

  1. Restore to an original or equivalent job with equivalent pay, and benefits.
  2. Continue group health insurance coverage

Federal FMLA

The federal Family Medical Leave Act applies to about only 40% of US workers. This means 60% could lose their job and health insurance immediately after taking time from work with no legal recourse. The remaining 40% face the same consequence if they remain away from the job for longer than twelve weeks.

State FMLA

Fifteen states have laws supplementing the federal FMLA. In some states, you may be eligible to extend job protections beyond twelve weeks. In others, the state law might expand the population eligible for job protection.

Preparing for an Unpaid Family Leave of Absence

Taking personal responsibility to prepare in advance of your need is the second step to surviving an unpaid family leave of absence. You have to take proactive steps before someone becomes sick or gets hurt. Arm yourself with short-term disability, an emergency fund, and by making yourself a valued employee.

Emergency Funds

Do not live check-to-check. Build an emergency fund with at least six months of regular living expenses. Begin saving now. Do not delay. Nobody has a crystal ball. You could have to stop working tomorrow. Will you be prepared?

If you divert 10% of your average expenses every month and apply them towards an emergency fund, it will take you five years to reach this goal.

Short-Term Disability

Buy short-term disability insurance before getting sick, hurt, pregnant, or until you have your six-month emergency fund. A policy will replace up to 2/3 of income for the covered person for up to 24 months. However, it will not cover preexisting conditions.

Women should buy a policy at work prior to conception. Policies sold through employer groups cover mom’s recovery from normal labor and delivery, which comes in handy during maternity leave.

Be a Valuable Employee

The laws of economics are far more effective and comprehensive than any government regulation could ever be. Hiring and training your replacement is expensive and time-consuming.

Be a valuable employee. Show gratitude at work. Invest in your skills. Your employer may bend over backward to accommodate the needs of a difficult-to-replace staff member. You might even land a different job that offers paid leave in order to attract and retain top talent.

Adjusting to an Unpaid Family Leave of Absence

The final step to surviving an unpaid family leave of absence is making the right adjustments as quickly as possible. Once you know that you need to stop working, the sooner you make needed changes, the longer you can stay afloat with one less income.

You might need to change your health insurance, take out a personal loan, and cut all unnecessary expenses.

Changing Health Insurance

Your employer may drop you from the group health insurance plan. You can elect to continue in the plan via COBRA, which is often much more costly because you now must pay 100% of the premiums yourself.

The loss of insurance is a qualifying life event. You can purchase a new plan outside of open enrollment. Now that your earnings are lower, you could qualify for premium and cost-sharing subsidies, which are income based.

Personal Loans

Take out a personal loan shortly after you stop working to provide a cushion of cash. Use the funds to stay current on your existing obligations, and avoid having the negative information appear on your credit report. The longer you wait to apply, the more difficult it will be to qualify.

Cutting Expenses

Cut all unnecessary spending the moment you stop working. Even if you have an emergency fund with six months of normal living expenses, you could run out of money sooner than you think. Your spending is not normal any longer. You now have to care for a sick household member. This means extra medical expenses, and non-medical costs for travel, cleaning services, and other needs.

You can survive an unpaid family leave of absence. It takes research, preparation, and quick adjustments. Are you ready?

About Kevin Haney

Kevin Haney is a former consumer credit bureau executive and licensed life and health insurance agency owner. You can dig more deeply into both topics at and


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Written By
Sydney White is a Texas-born stay at home mom who enjoys spending time with her family, bargain hunting and, of course, writing. She is currently the editor-in-chief of


  1. From where I live, there is really unpaid family leave of absence. So what I do is build my emergency fund to cover such expenses during this period. Spot on. I think I have to work on more to be a valuable employee to enjoy such benefits.

  2. An excellent reminder of the importance of an emergency fund, and I appreciated the addition of being a valuable employee. All great points. Make yourself indispensable in your position, and it will pay off in the form of better benefits and compensation. One additional item you can add to this list is multiple income streams. If you have a second source of income, it can help cushion the blow if it is passive enough or the hours are few enough that you can keep it running during the leave of absence.

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