What Does 13 Months of Extended Unemployment Mean? (Not What You Think.)

December 7, 2010

One of the key components of the agreement between the President and members of Congress announced yesterday is a 13 month extension of federal extended unemployment insurance programs. This extension does not affect the duration of benefits, which remain capped at 99 weeks. Here’s how it works.

Each state has an unemployment insurance program that covers most employers. Generally these programs cover the first 26 weeks of unemployment insurance. (31 states have exhausted their reserves in paying for these programs and have been borrowing from the federal government, with interest, to be able to make payments.)

After an individual has completed 26 weeks of state unemployment benefits, they may then begin receiving federal benefits as part of the Emergency Unemployment Compensation (EUC) program. EUC is divided into four tiers of varying length (and a total of 53 weeks), and as a person completes one tier they transition into the next one.

After an individual has completed EUC, they may then begin receiving benefits as part of the federal Extended Benefits (EB) program. EB is divided into two tiers of a total of 20 weeks. (All tiers in EUC and EB may not exist for states under varying unemployment rate thresholds.)

If an individual is in a particular tier when the EUC or EB programs end, they can (I think) complete that tier, but they cannot move into another tier. So, until the recent agreement, you had people in various tiers exhausting their benefits and unable to move to the next tier, even if they had received less than 99 weeks of payments (26+53+20). The newly unemployed could not move into any tiers after the initial 26 weeks of state payments.

When you hear that Congress is debating the extension of unemployment benefits, what that generally means is attempts to renew the EUC and/or EB programs to continue operating, allowing people to continue moving through the various tiers. Aside from some congressional proposals to add more post-99 week tiers, extending unemployment benefits does not change the fact that benefits are capped at 99 weeks, after beneficiaries exhaust all the tiers. The deal means that EUC and EB will continue to exist for another 13 months.

The Wisconsin Department of Workforce Development and the National Employment Law Project have stellar websites explaining this. Here are the tiers:

Program

Weeks Available

Notes

Regular Unemployment Insurance

up to 26 weeks

EUC Tier 1

up to 20 weeks

EUC Tier 2

up to 14 weeks

EUC Tier 3

up to 13 weeks

State has insured unemployment rate of at least 4% or total unemployment rate of at least 6% (nearly all states)

EUC Tier 4

up to 6 weeks

State has insured unemployment rate of at least 6% or total unemployment rate of at least 8.5% (most states)

EB

up to 13 weeks

State has average unemployment rate in last 3 months of 6.5% or more

High EB

up to 7 weeks

State has average unemployment rate in last 3 months of 8% or more

Note: EB and High EB can also trigger for a state if those receiving unemployment insurance equal 5% or more of those employed.


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