September UPDATE: The 2012 Unemployment Insurance Extension: A Detailed Q&A
Posted by: Mitchell Hirsch on Sep 06, 2012
September UPDATE: 9.6.2012 - Under the Middle Class Tax Relief and Job Creation Act of 2012, enacted in February, the federal Emergency Unemployment Compensation (EUC) program has been scaled back and is set to expire at the end of 2012. As a result of changes to the EUC program, fewer weeks of unemployment insurance (UI) benefits are available today compared to earlier in the year, even though unemployment rates remain high in many states (see Table 2).
- The phase out of EUC began in June 2012 when the unemployment rate requirements for tiers 2–4 increased, causing several states to lose a tier of benefits.
- This September EUC will be scaled back by at least six weeks in all states and as many as ten weeks in 22 states.
- If Congress fails to reauthorize federal unemployment insurance benefits before the end of the year, more than 2 million workers will be cut off UI during the holiday season, while federal benefits will no longer be available for recently laid-off workers.
Starting in September, the EUC program will provide six fewer weeks of benefits, causing the maximum duration of benefits to fall from 79 to 73 weeks in the higher unemployment states, and even fewer weeks in all other states (see Table 1). The following changes will reduce the number of weeks of Tiers 1 and 3 benefits, while increasing the number of weeks of Tier 4 benefits.
Table 1 outlines the changes to numbers of weeks available and unemployment rate triggers for the Tiers of EUC during the phased changes in 2012:
In contrast to previous reauthorizations of the EUC program, the February legislation did not allow for federal UI benefits to phase out gradually. Under the current law, all EUC payments will end abruptly for all claimants on December 29, 2012. This hard cutoff also means that unemployed workers who lose their jobs in July 2012 or later will only be eligible for regular state benefits (26 weeks in most states) and will not receive any federal UI payments. Seven states that cut the duration of regular state UI benefits will offer even fewer weeks. For example, if the federal program is allowed to expire without further reauthorization, individuals who lose their jobs today in Georgia, Michigan, Missouri and South Carolina will be eligible for only 20 weeks of UI benefits.
Changes in the maximum weeks of UI benefits available during 2012 are noted in Table 2 below. (Note: the chart assumes 26 weeks of regular state benefits in all states, which is not the case, as noted above.) Click on the image for a full-size PDF version.
See below for the previous June 2012 Update and updated March 2012 Q&A blog post:
June 1, 2012 UPDATE -- Reductions in availability of federal unemployment insurance benefits continue to take effect under the 2012 extension law. We will summarize the recent changes here, but please refer to the fact sheet released June 2012 by NELP on the phase-out of federal unemployment insurance for more details, including charts showing changes in maximum weeks in states. Scroll down below these updates to read the full Q&A blog post,
Summary of Recent Changes
Extended Benefits (EB): In June, payments of Extended Benefits (EB) end in New York, D.C. and West Virginia. In July we project EB payments will end in Nevada, New Jersey and Rhode Island. We project that EB will end in August in Idaho. The June-July-August expirations of EB will impact an estimated 116,500 workers. EB payments have already ended in the period January-through-May in the following states, effecting an estimated total of 410,800 workers: MN, NM, ME, MI, KS, MD, MA, WI, DE, AL, MO, OH, TN, WA, IN, OR, KY, SC, GA, TX, PA, CT, CO, IL, FL, NC, CA.
Emergency Unemployment Compensation (EUC): The February UI legislation imposed a new unemployment rate requirement for Tier 2 EUC benefits and increased the unemployment rate necessary to qualify for Tiers 3 and 4. Twenty-four states will immediately lose a tier of EUC benefits in June, while many other states will fail to meet the new eligibility requirements in the coming months if unemployment rates continue to decline.
Tier 4: 5 states that previously qualified for six weeks of Tier 4 will not meet the new 9 percent unemployment rate requirement (Arizona, Illinois, Kentucky, Michigan, and Oregon). Workers who lost their jobs in February 2011 and later will be harmed by the elimination of Tier 4 in these states. (note: New York State has temporarily triggered back on to Tier 4, according to the state website.)
Tier 3: 8 states that previously qualified for 13 weeks of Tier 3 will not meet the new 7 percent unemployment rate requirement (Delaware, Hawaii, Kansas, Maryland, Massachusetts, Montana, West Virginia, and Wisconsin). Workers who lost their jobs in May 2011 and later will be harmed by the elimination of Tier 3 in these states.
Tier 2: 11 states will not meet the 6 percent unemployment rate threshold necessary to qualify for 14 weeks of Tier 2 (Iowa, Minnesota, Nebraska, New Hampshire, North Dakota, Oklahoma, South Dakota, Utah, Vermont, Virginia, and Wyoming). Workers who lost their jobs in August 2011 and later will be harmed by the elimination of Tier 2 in these states.
Unemployed workers already within a tier that is ending will be able to finish out their entitlement, but no new claimants will be able to enter the tier once it is gone. For example, in the 24 states that will no longer meet the new EUC unemployment rate requirements, the week ending June 23rd will be the final week in which claimants can exhaust benefits in their current tier and still establish eligibility for a subsequent tier that is ending. After that date, claimants exhausting benefits in their current tier will be unable to move onto the next tier.
The least total available weeks of combined state and federal benefits is now 46 in June, down from 60 weeks in May. Due to the winding down of EB in nearly all states, the highest number of maximum weeks available is effectively 79 -- limited to those states with unemployment rates of 9% or higher -- down from 99 weeks previously.
Please refer to NELP's June 2012 fact sheet on the phase-out of federal unemployment insurance for additional changes and benefit week reductions coming in September and later this year.
Excerpts from the original March 2012 Q&A follow below:
(posted March 13, 2012 - updated September 6, 2012)
New legislation authorizing federal unemployment insurance programs for the remainder of 2012 was recently passed by Congress and signed by President Obama. The new law (Middle Class Tax Relief and Job Creation Act of 2012) stipulates a number of changes to the federal UI programs, including phased-in changes in the number of weeks of available benefits and some new unemployment rate triggers for certain tiers of the extensions. It is an even more complicated program now than it was before. And, thus far, some state agencies that administer the program have been slow to update unemployment insurance claimants about the changes. Here, we’ll try to clear up at least some of the confusion and answer some of the most important questions about what’s happening with unemployment insurance – Q&A style.
Q: When does the new law take effect?
A: It is effective as of March 1, 2012. But changes in benefit durations and availability occur in stages over the course of the rest of calendar year 2012. The first stage is the period March 1 through May 31. The second stage is June 1 through August 31. A third stage is September 1 through December 31.
Q: Does the new federal UI extension law add any more weeks of benefits?
A: No. In fact, the maximum duration of benefits in most states is reduced from prior levels over the course of the three time period stages this year.
Q: When does someone become eligible for the federal UI benefits under the new law?
A: As in prior years, while the federal Emergency Unemployment Compensation (EUC) extensions of federal UI benefits remain authorized, they become available to eligible unemployed workers when their regular state unemployment benefits are exhausted. In most states, those regular state benefits are available for up to 26 weeks (Michigan, Missouri and South Carolina have reduced state benefits to a maximum of 20 weeks; Florida has enacted a sliding scale from 12 to 23 weeks based on the unemployment rate, and is currently paying up to 22 weeks; Illinois and Arkansas reduced the maximum state weeks to 25.) Assuming a claimant remains eligible, once regular state benefits are exhausted, the claimant’s unemployment insurance account would then offer benefits first in Tier I of the Emergency Unemployment Compensation (EUC) program. Tier II becomes available in qualifying states if claimant maintains eligibility after Tier I is exhausted. Tiers III and IV may then be available depending on the state and its 3-month average unemployment rate.
Q: What is NOT changing during the first stage -- from March 1 to May 31 -- in federal benefit durations under the new law?
A: Many states will see no changes during the first stage of the 2012 program (March 1 through May 31) [see Table A below]. In the existing EUC program, Tier I (extending for up to 20 weeks) and Tier II (extending for up to 14 weeks), continue to be available in all states regardless of their unemployment rates. Similarly, in this first stage, states with 3-month average unemployment rates of 6% or higher will continue to offer Tier III (extending up to 13 weeks). States with 3-month average unemployment rates between 6.5% and 8% that maintain Extended Benefits (EB) during this period will continue to provide up to 13 weeks of EB. And states with unemployment rates of 8.5% or higher that also maintain EB eligibility will continue to provide up to 6 weeks of EUC Tier IV benefits as well as up to 20 weeks EB. (Note: As of August, 2012, federal Extended Benefits were no longer available in any states.)
Q: What DOES change during the first stage from March 1 to May 31?
A: From March 1 to May 31, some states will see changes in either EUC Tier IV or Extended Benefits (EB) – or in some case in both programs. [see Table A below] Here’s where we start to get into the weeds, so stay with us. States with unemployment rates of 8.5% or higher that are eligible for EUC Tier IV but do not have EB or recently had their EB end will have up to 10 weeks of additional EUC Tier IV benefits (for a total of up to 16 weeks) during this time period only. Currently, those states are Arizona, Michigan and Mississippi, as well as Puerto Rico. Other states with Tier IV benefits where their EB programs end during this time period would be eligible for the additional 10 weeks in Tier IV. States that are not eligible for EUC Tier IV and whose EB programs end during this time period would not qualify for the additional 10 weeks of benefits – they would lose their weeks of EB. (Note: As of August, 2012, federal Extended Benefits were no longer available in any states.)
(note: additional Q&A follows below the Table)
Table A below shows available weeks of benefits and applicable unemployment rate triggers for each of the three time period stages during the remainder of 2012. Click on the Table A image to view a full sizable version in PDF in a new window. Please see important notes below the Table for additional state-specific information.
Q: What happens in the second stage this year, between June 1 and August 31?
A: There will be no change to EUC Tier I during this time period – it will remain available in all states at up to 20 weeks. EUC Tier II will continue to provide up to 14 weeks, but, in a change, will only be available in states with 6% or higher three-month average unemployment rates. [see Table A above] EUC Tier III will continue with up to 13 weeks, but the unemployment rate trigger will increase to 7% from the previous 6%. The EUC Tier IV unemployment rate trigger will increase to 9% from 8.5% -- and the number of weeks will return to 6 in Tier IV. More states will likely see their EB programs end, but would not see any additional EUC Tier IV weeks should they lose EB during this time period. Based on current estimates, the following states are most likely to lose their EB weeks during this period: CA, CT, FL, GA, IL, NJ, PA, NV, TX and WV.
Q: What happens in the third stage this year, between September 1 and December 31?
A: EUC Tier I will continue to be available in all states, but will provide up to 14 weeks of benefits, a reduction from the previous 20 weeks. [see Table A above] EUC Tier II will continue at up to 14 weeks in states with unemployment rates of 6% or higher. EUC Tier III will provide up to 9 weeks, a reduction from the previous 13 weeks, in states with unemployment rates of 7% or higher. EUC Tier IV will continue to be available in states with unemployment rates of 9% or higher, but the number of available weeks will increase to 10 during this time period, up from the previous 6 weeks. It is expected that any remaining EB programs would end during this time period.
Q: What happens after December 31, 2012 under the new law?
A: The new law is written with a hard cut-off, allowing for final payments to be made in the first week of January of 2013, and no payments thereafter. So, under the new law, the last week of December 2012 would be the final week to file a claim for federal benefits. Unless Congress acts to reauthorize the federal UI program, or it enacts a new federal UI extension program in its place, after the first week of next year all funding of federal unemployment insurance would be cut off. In other words, no EUC or EB benefits would be payable for any week after the week ending January 5, 2013. This hard cut-off is unlike prior iterations of the program that would have provided for some phasing out, with claimants remaining eligible to complete whatever EUC Tier they may have been in. The new law does not include such a provision.
Q: If I come to the end of EUC Tier II benefits after June 1 and the 3-month average unemployment rate in my state drops below 7% would I still be eligible for Tier III benefits?
A: No. If you had not yet begun to receive Tier III benefits and, after June 1 your state did not meet the new 7% or higher Tier III trigger, Tier III benefits would not be available to you.
Q: If I have already begun to receive benefits in an EUC Tier and my state subsequently either triggers off of that EUC Tier or enters a time period of reduced weeks of benefits for that Tier, would I be immediately cut off of that Tier or have those weeks reduced?
A: No. Once you begin an EUC Tier of benefits, an account is established for the weeks of benefits in that Tier for you, and those weeks in that Tier of benefits would be available to you regardless of any subsequent reduction or trigger “off” event -- unless Congress allows the entire EUC program to expire at the end of 2012, in which case all EUC payments would abruptly end.
Q: Are there new work search or other eligibility requirements for federal Emergency Unemployment Compensation (EUC) claimants?
A: Yes. States are required to notify claimants as to the new work search and eligibility requirements, so claimants should be on the lookout for communications via mail, email or phone. All EUC claimants will need to meet the following new work search requirements: individuals must be able to work, available for work, and actively seeking work in order to qualify for EUC benefits. According the U.S. Department of Labor ‘actively seeking work’ means individuals must:
- Register for employment services as prescribed by the state;
- Engage in an active search for work and make appropriate employer contacts in light of the labor market, and their skills and capabilities;
- Maintain a detailed record of their employer contacts; and
- Provide their work search records to the state upon request
In addition, as of March 23, 2012 workers establishing new claims for EUC Tier I or Tier II will be required to participate in the reemployment services and in-person reemployment, skills and eligibility assessments adopted by states as required under the new law. New EUC Tier I and Tier II claimants should be on the lookout for communications from state agencies on these newly-required services.
Q: For those who have been receiving unemployment insurance benefits, and who believe they continue to be eligible, what should folks be doing now?
A: Assuming you maintain your eligibility, and have not found new work, simply continue to file your claims in a timely manner and meet any work-search and eligibility assessment requirements (such as those indicated above) as communicated by your state agency.
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