Unemployment Extension

One topic that seems to be in the news on a regular basis is whether Congress will continue to allow for an unemployment extension of unemployment insurance benefits. The availability of benefits has shifted multiple times over the course of the last several years and has been a part of multiple pieces of major legislation in Washington D.C. Here is a breakdown of Congress’ extending unemployment benefits and whether we can expect any unemployment extensions in the future.

Unemployment Benefits Generally

Unemployment insurance (“UI”) is normally provided by the particular state an individual lives in for the initial period of eligibility – which is anywhere between 13 and 26 weeks depending on the state. The initial period fluctuates based on the unemployment rate of that particular state. Once someone has run out of the initial state benefits a federal unemployment benefits extension kicks in and allows the person to continue receiving unemployment income for up to another 50 weeks. Following the expiration of federal extension benefits the state can then kick in for another 13 weeks. There are then more weeks of available benefits from the federal government, up to 10 additional weeks of unemployment benefits. Therefore, in some cases, people will be eligible for up to 99 weeks of benefits before they need to find an alternative method of income.

Extension Expansion

Unemployment extension legislation expanded the availability of unemployment benefit extension payments up to the 99 weeks in the American Recovery and Reinvestment Act of 2009 (sometimes this legislation is also referred to as the “American Reinvestment and Recovery Act” or the “Stimulus Bill”). Through the Stimulus bill legislation, people who were eligible for the full 99 weeks of unemployment were required to apply for their final tier of benefits no later than December 31, 2011. However, recent legislation that was all a part of the August 2011 laws allowing the United States’ debt ceiling to rise, has further changed some aspects of unemployment extension laws.

The main difference following the debt ceiling expansion legislation passed in August 2011 is that a federal unemployment benefits extension will now be eliminated beginning January 1, 2012 and there is now a reduction in the number of weeks someone can receive benefits payments for. People who became unemployed beginning on August 1, 2011 or later are no longer able to receive the federal extended benefits.

With the United States’ unemployment level sitting at over 9% as of the date this article is being written, this reduction of benefits may put hundreds of thousands of people into a financial bind where they run out of unemployment benefit extensions but still have not found a job. Although the answer to the question “Will Congress extend unemployment benefits?” seems to be no after the August 2011 legislation, things could certainly change if the total economic outlook of the United States worsens.

The reality is that both the individual states and the United States government are strapped for cash. Something has to give. Unfortunately, one of the things that appears to be “giving” are federal and (in some cases) state unemployment extension payments.

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