How Is Unemployment Insurance Funded. The federal government sets certain basic ground rules, while. States provide most of the funding and pay for the actual benefits provided to workers;
State governments get the money to pay claims by debiting the employer’s ui. The federal unemployment insurance (ui) trust fund finances the costs of administering. The british unemployment compensation scheme was based on actuarial principles, and it was funded by a fixed amount contributed by workers, employers, and taxpayers.