Search Penny Hill Press

Monday, March 1, 2010

Unemployment Insurance Provisions in the American Recovery and Reinvestment Act of 2009

Alison M. Shelton
Analyst in Income Security

Julie M. Whittaker
Specialist in Income Security

The American Recovery and Reinvestment Act of 2009 (P.L. 111-5, also known as ARRA or the 2009 stimulus package) contained several provisions affecting unemployment benefits, described below. 

• ARRA temporarily increased unemployment benefits by $25 per week for all recipients of regular unemployment compensation (UC), extended benefits (EB), emergency unemployment compensation (EUC08), Trade Adjustment Assistance (TAA) programs, and Disaster Unemployment Assistance (DUA). 

• The act extended the temporary EUC08 program through December 26, 2009 (with grandfathering), to be financed by federal general revenues. The EUC08 program's expiration date has since been further extended. 

• It provided for temporary 100% federal financing of the EB program, to be financed by the federal government through the Unemployment Trust Fund. 

• ARRA allowed states the option of changing temporarily the eligibility requirements for the EB program to expand the number of persons eligible for EB benefits, to end before June 1, 2010. 

• It provided for an additional 13 weeks to the maximum amount of time railroad workers may receive extended unemployment benefits. 

• The legislation suspended income taxation on the first $2,400 of unemployment benefits received in 2009, for taxable years beginning after December 31, 2008. 

• It provided relief to states from the payment and accrual of interest on federal loans to states for the payment of unemployment benefits, from enactment of the stimulus package on February 17, 2009, through December 31, 2010. 

• ARRA provided for a special transfer of up to $7 billion in federal monies to state unemployment programs as "incentive payments" for changing certain state UC laws. All incentive payments must be made before October 1, 2011. States do not need to repay these sums to the federal government. Any changes that states make to state unemployment programs as a result of ARRA's modernization provisions would be permanent. 

• Finally, the act transferred a total of $500 million to the states for administering their unemployment programs, within 30 days of enactment of the 2009 stimulus package. States do not need to repay these sums to the federal government. 

This report addresses some of the more common questions about unemployment insurance in the 2009 stimulus package as Congress approved it in February 2009. The report does not provide operational details of unemployment insurance programs such as UC, EB, or EUC08, nor does it address the TAA or DUA programs. 

Since ARRA's passage, certain elements of the package have been authorized for additional months and the EUC08 program has been expanded to include additional benefit tiers. For more information, see CRS Report RL33362, Unemployment Insurance: Available Unemployment Benefits and Legislative Activity, by Julie M. Whittaker and Alison M. Shelton.

This report will not be updated. 

Date of Report: February 17, 2010
Number of Pages: 12
Order Number: R40368
Price: $29.95

Document available electronically as a pdf file or in paper form.
To order, e-mail or call us at 301-253-0881.