Extension of Unemployment Benefits

The laws dealing with the extension of unemployment benefits have undergone several different changes since Congress and President Obama implemented the American Recovery and Reinvestment Act of 2009.  Under that 2009 law, individuals were granted the opportunity to receive (in some instances) not only an economic recovery payment but also the right to unemployment extensions.  Additional legislative changes in 2010 further increased the availability of federal unemployment benefits extension payments to a maximum of 99 weeks.  However, following the increase in unemployment benefits extended to unemployed and underemployed individuals the new trend since the summer of 2011 is to decrease the amount of payments available to citizens.  Inside this article we break down the current status of unemployment benefits and explain how the extension of unemployment benefits works.

How Unemployment Benefits Work

The unemployment benefit program is a hybrid of both state and federally-funded money.  The initial round of benefits paid to someone are generally with funds from that particular state the benefactor resides in.  Depending on the unemployment rate of the state, the initial round of benefits can be anywhere from 13 to 26 weeks.  Following the expiration of the state-funded unemployment insurance term federal money kicks in to allow for an extension of unemployment benefits for up to another 53 weeks.  Following law changes in 2009 and 2010, states can then kick in another 20 weeks of benefits after the federal 53 week period has expired.  All told, someone who completely maxes out their benefits and unemployment benefit extensions can receive almost two full years worth of unemployment payments.

Limitations On the Horizon

However, the ability to maximize benefits for up to 99 weeks is now being severely limited.  As part of the legislation that was passed in August of 2011 to raise the debt ceiling of the United States, Congress and President Obama have now barred anyone who had not become unemployed or underemployed on or before July 31, 2011 from being entitled to unemployment extensions. 

Additionally, certain individual states are taking or have already taken steps to limit the amount of their budgets that will be devoted to unemployment payments.  For example, Michigan, one of the hardest hit states during this latest U.S. economic recession, recently reduced the number of weeks the state will pay out its first tier of benefits from 26 to 20.  This reduction will become effective at the beginning of 2012.  Moreover, Florida is seriously looking at cutting benefits down to only 12 weeks of primary benefits before an individual would have to receive an extension of unemployment benefits through the federal government.

What the Future Holds

All told, the pattern for the future with respect to whether someone will qualify for an unemployment benefit extension seems to look more limited than expansive.  The reality is that the states and United States government budgets are, for the most part, at their limits.  With 99 weeks of benefits already at play, the number is much more poised to go down than anywhere else.

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