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Thursday, December 23, 2010

Unemployment Insurance: Available Unemployment Benefits and Legislative Activity

Katelin P. Isaacs
Analyst in Income Security

Julie M. Whittaker
Specialist in Income Security

Alison M. Shelton
Analyst in Income Security

Various benefits may be available to unemployed workers to provide income support. When eligible workers lose their jobs, the Unemployment Compensation (UC) program may provide up to 26 weeks of income support through the payment of regular UC benefits. Unemployment benefits may be extended for up to 53 weeks by the temporarily authorized Emergency Unemployment Compensation (EUC08) program. Unemployment benefits may be extended for up to a further 13 or 20 weeks by the permanent Extended Benefit (EB) program under certain state economic conditions. Certain groups of workers who lose their jobs because of international competition may qualify for income support through Trade Adjustment Act (TAA) programs. Unemployed workers may be eligible to receive Disaster Unemployment Assistance (DUA) benefits if they are not eligible for regular UC and if their unemployment may be directly attributed to a declared major disaster.

The authorization for the EUC08 program expires the week ending on or before January 3, 2012. Those beneficiaries receiving tier I, II, III, or IV EUC08 benefits before December 31, 2011, are “grandfathered” for their remaining weeks of eligibility for that particular tier only. There will be no new entrants into any tier of the EUC08 program after December 31, 2011. See the section in this report on “Policy Proposals that Target Unemployment Benefit Exhaustees” for additional measures to address the needs of the long-term unemployed.

The American Recovery and Reinvestment Act of 2009 (ARRA), P.L. 111-5, contained several provisions affecting unemployment benefits. ARRA temporarily increased benefits by $25 per week (Federal Additional Compensation, or FAC); extended the EUC08 program through 2009; temporarily provided for 100% federal financing of EB; and allowed states the option of temporarily easing EB eligibility requirements. ARRA also suspended income taxation on the first $2,400 of unemployment benefits received in 2009. In addition, states do not owe or accrue interest, through December 2010, on federal loans to states for the payment of unemployment benefits. ARRA also 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 as well as transferred $500 million to the states for administering unemployment programs. P.L. 111-92 expanded the number of weeks available in the EUC08 program through the creation of two additional tiers. P.L. 111-118 and P.L. 111-144 extended the EUC08 program, 100% federal financing of EB, and the FAC through the end of February 2010 and April 5, 2010, respectively. P.L. 111-157 extended these three UC provisions through the week ending on or before June 2, 2010. P.L. 111-205 extended the availability of EUC08 through November 27, 2010, and 100% federal financing of the Extended Benefit (EB) program until December 1, 2010, but did not extend the authorization for the $25 FAC benefit, which expired on May 29, 2010 (May 30, 2010, in New York state).

On December 17, 2010, the President signed H.R. 4853, the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. H.R. 4853 extends the authorization for the EUC08 program until January 3, 2012, and the 100% federal financing of EB through January 4, 2012. H.R. 4853 also contains a provision that would allow states to use three-year lookback calculations in their mandatory insured unemployment rate (IUR) and optional total unemployment rate (TUR) triggers (rather than the two-year lookback calculations under current law) to trigger on or keep on a period of EB benefits if they would otherwise trigger off or not be on a period of EB benefits.

Date of Report: December 17, 2010
Number of Pages: 41
Order Number: RL33362
Price: $29.95

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