The Unemployment Insurance Program established by the Social Security Act of 1935 arose from the need to provide workers with funds for non-deferrable expenses while between jobs. Unemployment Insurance is not welfare. Benefits are paid as a matter of right, without regard to need, to eligible claimants who meet conditions fixed by law. To qualify, workers must have earned sufficient base period wages from covered employers, have become unemployed through no fault of their own, and be able to work, available for work and actively seeking work (Section 3314, Title 19, Delaware Code)

The unemployment insurance benefits paid to eligible, out of work, individuals comes from a trust fund contributed to by employers who are subject to a quarterly payroll tax on the taxable wages paid to each employee during the year. Workers do not pay any part of the Delaware tax, and employers can make no payroll deductions for this purpose. Assessed employers can receive a credit up to 5.4% toward the 6.2% Federal Unemployment Tax (FUTA). The amount of credit an employer receives is determined by State contributions, which they have paid under an approved State unemployment insurance law. The Federal government then returns part of these monies collected from the Federal unemployment tax to the States to pay the cost of unemployment insurance program administration. The rest of the money goes to pay the cost of administration of the unemployment insurance program at the Federal level.

The Unemployment Insurance program assists in stabilizing the economy because it allows wage earners to maintain consumption expenditures when they lose their jobs, maintains an available, skilled labor force, and encourages employers to provide more stable employment.