Order Code RL33362
CRS Report for Congress
Received through the CRS Web
Unemployment Insurance: Available
Unemployment Benefits and Legislative Activity
April 14Updated May 23, 2006
Julie M. Whittaker
Analyst in Applied Microeconomics
Domestic Social Policy Division
Congressional Research Service ˜ The Library of Congress
Unemployment Insurance: Available Unemployment
Benefits and Legislative Activity
Summary
A variety of benefits may be available to unemployed workers to provide them
with income support during a spell of unemployment. When eligible workers lose
their jobs, the Unemployment Compensation (UC) program may provide income
support through the payment of UC benefits. Certain groups of workers who lose
their jobs on account of international competition may qualify for additional or
supplemental income support through Trade Adjustment Act (TAA) programs. UC
benefits may be extended at the state level by the Extended Benefit (EB) program if
certain economic situations within the state exist. As of this writing, the EB program
is not currently triggered “on” in any state. The EB program for Louisiana triggered
“off” on February 25, 2006. Unemployed Louisiana workers who exhausted their
regular UC benefits before February 25, 2006, were eligible for 13 weeks of EB;
unemployed Louisiana workers who exhausted their regular UC benefits after
February 25, 2006, were not eligible for the EB program. During some economic
recessions, Congress has created a federal Temporary Extended Unemployment
Compensation (TEUC) program. These programs generally have extend UC benefits
for an additional 13 weeks and have an expiration date. As of this writing, no TEUC
program exists and these benefits are not available.
If an unemployed worker is not eligible to receive UC benefits and the worker’s
unemployment may be directly attributed to a declared major disaster, a worker may
be eligible to receive Disaster Unemployment Assistance (DUA) benefits. The
disaster declaration will include information on whether DUA benefits are available.
The 109th Congress considered many bills intending to mitigate the impact of
Hurricane Katrina.
P.L. 109-91, the QI, TMA, and Abstinence Programs Extension and Hurricane
Katrina Unemployment Relief Act of 2005, Section 201, created a special
Unemployment Trust Fund (UTF) transfer from the Federal Unemployment Account
(FUA) for FY2006 to the state UTF accounts of Alabama ($15 million), Louisiana
($400 million), and Mississippi ($85 million). Section 202 of the law allows
administrative funds received by any state to be used to assist in the administration
of claims for compensation on behalf of any other state if that other state was
declared a disaster under the Robert T. Stafford Disaster Relief and Emergency
Assistance Act by reason of Hurricane Katrina.
P.L. 109-176, the Katrina Emergency Assistance Act of 2006, extended DUA
benefits for persons eligible for DUA benefits under the Robert T. Stafford Disaster
Relief and Emergency Assistance Act by reason of Hurricane Katrina for an
additional 13 weeks.
This report will be updated as legislative events warrant.
Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Unemployment Compensation (UC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
UC Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
States Set Most of the Eligibility Rules . . . . . . . . . . . . . . . . . . . . . . . . . 2
UC Benefit Determination and Duration . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
UC Benefit Financing: Unemployment Taxes on Employers . . . . . . . . . . . . 4
Federal Unemployment Tax Act (FUTA). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
State Unemployment Compensation Tax . . . . . . . . . . . . . . . . . . . . . . . 5
Outstanding Loans from the Federal Unemployment
Account (FUA) . . . . . . . . . . . . . Account (FUA) . 7
Trade Adjustment Assistance (TAA): Unemployment Benefit Extensions
for Workers Unemployed on Account of International Trade . . . . . . . . . . . . 8
TAA Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Trade Adjustment Assistance (TAA): Unemployment Benefit Extensions
for Workers Unemployed on Account of International Trade. . . . . . . . . . . . . . . . . . . . . 8
TAA Eligibility . .Benefits and Duration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
TAA Benefits and Duration8
Other Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Other BenefitsTAA Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Extended Benefit (EB) Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
EB Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
EB Benefits and Duration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
EB Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Temporary Extended Unemployment Compensation (TEUC) Program
(Currently Expired) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Federal Temporary Extended Unemployment Compensation
(TEUC) ProgramProgram . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
TEUC Benefits and Duration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
TUEC Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Disaster Unemployment Assistance (DUA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
DUA Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
DUA Benefit Determination and Duration . . . . . . . . . . . . . . . . . . . . . . . . . 12
DUA Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Legislative Issues in the 109th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
List of Tables
Table 1. State Unemployment Compensation (UC) BenefitsCompensationBenefits Amounts,
January 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Table 2. State Unemployment Taxes: Taxable Wage Base and Rates,
January 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Table 3. Revenue and Spending Associated With Unemployment
Compensation (UC), FY2000-FY2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Unemployment Insurance:
Available Unemployment Benefits and
Legislative Activity
Introduction
A variety of benefits may be available to unemployed workers to provide them
with income support during a spell of unemployment. The cornerstone of this
income support is the joint federal-state Unemployment Compensation (UC)
program, which may provide income support through the payment of UC benefits.
Other programs that may provide workers with income support are more specialized.
They may target special groups of workers, be automatically triggered by certain
economic conditions, be temporarily created by Congress with a set expiration date,
or target typically ineligible workers through a disaster declaration.
Certain groups of workers who lose their jobs because of international
competition may qualify for additional or supplemental income support through
Trade Adjustment Act (TAA) programs or (for certain workers 50 years old and
older) the Alternative Trade Adjustment Act (ATTA) program.
UC benefits may be extended at the state level by the Extended Benefit (EB)
program if certain economic situations within the state exist. As of this writing, no
EB program is triggered “on” in any state. During some economic recessions, the
federal government has created a federal Temporary Extended Unemployment
Compensation (TEUC) program. These programs generally extend UC benefits for
an additional 13 weeks and have an expiration date. As of this writing, no TEUC
program exists and these benefits are not available.
If an unemployed worker is not eligible to receive UC benefits and the worker’s
unemployment may be directly attributed to a declared major disaster, a worker may
be eligible to receive Disaster Unemployment Assistance (DUA) benefits. The
disaster declaration will include information on whether DUA benefits are available.
This report describes these five kinds of unemployment benefits — regular
Unemployment Compensation (UC), Trade Adjustment Act (TAA), Extended
Benefit (EB), Temporary Extended Unemployment Compensation (TEUC), and
Disaster Unemployment Assistance (DUA) UC,
TAA, EB, TEUC, and DUA. The report explains their basic
eligibility requirements,
benefits, and financing structure.
CRS-2
Unemployment Compensation (UC)
Unemployment Compensation (UC)UC is a joint federal-state program financed by
federal taxes under the Federal
Unemployment Tax Act (FUTA) and by state payroll
taxes under the State
Unemployment Tax Acts (SUTA). The underlying framework
of the UC system is
contained in the Social Security Act (the act). Title III of the act
authorizes grants to
states for the administration of state UC laws, Title IV authorizes
the various
components of the federal Unemployment Trust Fund (UTF), and Title
XII XII
authorizes advances or loans to insolvent state UC programs.
The U.S. Department of Labor (DOL) administers the federal portion of the UC
system, which operates in each state, the District of Columbia, Puerto Rico, and the
Virgin Islands. Federal law sets broad rules that the 53 state programs must follow.
These include the broad categories of workers that must be covered by the program,
the method for triggering the extended benefit (EB)EB program, the minimum upper
state unemployment
tax rate to be imposed on employers (5.4%), and how the states
will repay UTF loans.
If the states do not follow these rules, their employers may
lose a portion of their
state unemployment tax credit when their federal
unemployment tax is calculated.
The federal tax pays for both federal and state
administrative costs, the federal share
of the EB program, loans to insolvent state UC
accounts, and state employment
services.
The UC system helps counter economic fluctuations. When the economy
grows, UC program revenue rises and program spending falls, thereby slowing
economic growth. In a recession, program revenue falls and program spending rises,
stimulating the economy.
UC Eligibility
States Set Most of the Eligibility Rules. The UC system pays benefits to
covered workers who become involuntarily unemployed for economic reasons and
meet state-established eligibility rules. The UC system generally does not provide
UC benefits to the self-employed, to those who are unable to work, or to those who
do not have a recent earnings history.
States usually disqualify claimants who lost their jobs because of inability to
work or unavailability for work, who voluntarily quit without good cause, who were
discharged for job-related misconduct, who refused suitable work without good
cause, or a labor dispute. To receive UC benefits, claimants must have enough recent
earnings to meet their state’s earnings requirements.
In summary, to be eligible to receive UC benefits a worker must
!
!
!
!
have lost a job through no fault of his or her own,
be actively searching for work,
be able to work, and
have had a minimum number of weeks worked and/or number of
quarters worked recorded in the previous five quarters, and/or
CRS-3
!
have earned a minimum amount of wages in a quarter and/or for five
quarters.
UC Benefit Determination and Duration
Generally, benefits are based on wages for covered work over a 12-month
period. Most state benefit formulas replace half of a claimant’s average weekly wage
up to a weekly maximum. Table 1 lists the minimum and maximum UC benefits for
each state. Weekly maximums in January 2006 ranged from $210 (Mississippi) to
$528 (Massachusetts) and, in states that provide dependent’s allowances, up to $778
(Massachusetts). In FY2005, the average weekly benefit was $263. Benefits are
available for up to 26 weeks (30 weeks in Massachusetts). The average regular UC
benefit duration in FY2005 was 15.3 weeks.1
Table 1. State Unemployment Compensation (UC) Benefits
Amounts, January 2006
Benefits Amounts, January 2006
Minimum
Minimum If
Weekly UC
Dependent’s
Benefit Amount Allowance
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of
Columbia
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
1
Minimum
weekly UC
benefit amount
$45
$44
$60
$68
$40
$25
$15
$20
$50
$32
$40
$5
$51
$51
$50
$48
$93
$39
$10
$54
Minimum if
dependent’s
allowance
$68
$30
$57
$58
$81
Maximum
weekly UC
benefit amountWeekly UC
Benefit
Amount
$220
$248
$240
$382
$450
$421
$465
$330
$359
$275
$300
$459
$322
$350
$390
$324
$373
$365
$258
$313
Maximum if
dependent’s
allowance
If
Dependent’s
Allowance
$320
$540
$475
$398
$469
A federal-state extended benefits (EB) program offers benefits for an additional 13 to 20
weeks in states with unemployment rates above certain levels. The EB program is discussed
later in this report.
CRS-4
Minimum
weekly UC
benefit amount
Maryland
$25
Massachusetts
$29
Michigan
$81
Minnesota
$38
Mississippi
$30
Missouri
$48
Montana
$98
Nebraska
$30
Nevada
$16
New Hampshire
$32
New Jersey
$73
New Mexico
$62
New York
$40
North Carolina
$36
North Dakota
$43
Ohio
$96
Oklahoma
$16
Oregon
$101
Pennsylvania
$35
Rhode Island
$62
South Carolina
$20
South Dakota
$28
Tennessee
$30
Texas
$55
Utah
$25
Vermont
$57
Virginia
$54
Washington
$112
West Virginia
$24
Wisconsin
$51
Wyoming
$24
Minimum if
dependent’s
allowance
$65
$43
$111
$84
$75
$43
$112
Maximum
weekly UC
benefit amountMinimum If
Weekly UC
Dependent’s
Benefit Amount Allowance
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
$25
$29
$81
$38
$30
$48
$98
$30
$16
$32
$73
$62
$40
$36
$43
$96
$16
$101
$35
$62
$20
$28
$30
$55
$25
$57
$54
$112
$24
$51
$24
$65
$43
$111
$84
$75
$43
$112
Maximum
Weekly UC
Benefit
Amount
$340
$528
$362
$515
$210
$270
$346
$288
$346
$372
$521
$312
$405
$442
$340
$343
$317
$434
$497
$477
$303
$266
$275
$336
$383
$385
$330
$496
$380
$341
$330
Maximum if
dependent’s
allowance
If
Dependent’s
Allowance
$778
$360
$462
$505
$596
Source: Congressional Research Service (CRS) table compiled from Significant Provisions of State
Unemployment Insurance Laws, January 2006, U.S. Department of Labor, Employment and Training
Administration, at [http://www.ows.doleta.gov/unemploy/sigprojan2006.asp].
UC Benefit Financing: Unemployment Taxes on Employers
UC benefits are financed through employer taxes. The federal taxes on
employers are under the authority of the Federal Unemployment Tax Act (FUTA),
CRS-5
and the state taxes are under the authority given by the State Unemployment Tax
Acts (SUTA).
CRS-5
Federal Unemployment Tax Act (FUTA). If a state UC program complies
with all
federal rules, the net FUTA tax rate is reduced to 0.8% for employers. The
0.8%
FUTA tax funds both federal and state administrative costs as well as the
federal federal
share of the EB program, loans to insolvent state UC accounts, and state
employment employment
services. Federal law defines which jobs a state UC program must cover
for the
state’s employers to avoid paying the maximum FUTA tax rate (6.2%) on the
first first
$7,000 of each employee’s annual pay.2
Federal law requires that a state must cover jobs in firms that pay at least $1,500
in wages during any calendar quarter or employ at least one worker in each of 20
weeks in the current or prior year. The FUTA tax is not paid by government or
nonprofit employers, but state programs must cover government workers and all
workers in nonprofits that employ at least four workers in each of 20 weeks in the
current or prior year. (States are reimbursed for the expenditures on federal workers
by the federal government).
State Unemployment Compensation Tax. States levy their own payroll
taxes on employers to fund regular UC benefits and the state share of the EB
program. These state UC tax rates are “experience-rated,” in which employers
generating the fewest claimants have the lowest rates. The state unemployment tax
rate of an employer is, in most states, based on the amount of UC paid to former
employees. Generally, in most states, the more UC benefits paid to its former
employees, the higher the tax rate of the employer, up to a maximum established by
state law. The experience rating is intended to ensure an equitable distribution of UC
program taxes among employers and to encourage a stable workforce.
State UC revenue is deposited in the U.S. Treasury. These deposits count as
federal revenue in the budget. State accounts within the Unemployment Trust Fund
(UTF)UTF are credited for this
revenue. These credits allow Treasury to reimburse states
for their benefit payments
without annual appropriations, but these reimbursements
do count as federal budget
outlays.3
Table 2 lists each state’s taxable wage base and the minimum and maximum
tax rate a business might experience. State ceilings on taxable wages in 2006 ranged
from the $7,000 FUTA federal ceiling (nine states) up to $34,000 (Hawaii). The
minimum rates ranged from 0% (seven states) up to 1.69% (Rhode Island). The
maximum rates ranges from 5.4% (14 states) up to 11% (Minnesota).
2
For details on state UC taxes and legislation, see CRS Report RS22069, State
Unemployment Taxes and SUTA Dumping, by Julie M. Whittaker and Steven Maguire.
3
For details on UC financing, see CRS Report RS22077, Unemployment Compensation
(UC) and the Unemployment Trust Fund (UTF): Funding UC Benefits, by Christine Scott
and Julie M. Whittaker.
CRS-6
Table 2. State Unemployment Taxes: Taxable Wage Base and
Rates, January 2006
Maximum
state
unemployment
tax
6.04%
5.40
5.40
10.00
5.40State
Wages Subject to Tax
Minimum State
Unemployment Tax
Maximum State
Unemployment Tax
Alabama
Alaska
Arizona
Arkansas
California
$8,000
$28,700
$7,000
$10,000
$7,000
Minimum
state
unemployment
tax
0.44%
1.21
0.02
0.10
1.30
6.04%
5.40
5.40
10.00
5.40
Colorado
$10,000
0.30
5.40
Connecticut
Delaware
DC
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
$15,000
$8,500
$9,000
$7,000
$8,500
$34,000
$29,200
$11,000
$7,000
$21,300
$8,000
$8,000
$7,000
$12,000
$8,500
$14,000
$9,000
$24,000
$7,000
$11,000
$21,600
$8,000
$24,000
$8,000
$25,800
$17,900
$8,500
$17,300
$20,300
$9,000
$13,500
$28,000
$8,000
$16,000
$7,000
0.50
0.30
1.30
0.32
0.00
0.00
0.48
0.30
1.10
0.00
0.07
0.50
0.10
0.53
0.60
1.12
0.06
0.68
0.40
0.00
0.13
0.39
0.25
0.01
0.08
0.03
0.90
0.00
0.49
0.50
0.20
1.20
0.30
1.69
1.24
5.40
8.20
6.60
5.40
7.02
5.40
5.40
8.10
5.60
8.00
7.40
9.50
6.20
5.40
9.00
10.96
10.30
11.00
5.40
6.00
6.50
6.76
5.40
6.50
5.40
5.40
8.90
5.70
10.09
10.80
7.30
5.40
9.20
9.79
State
Wages subject
to tax
6.10
CRS-7
State
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
Minimum
state
unemployment
tax
1.24
0.00
0.30
0.40
0.40
0.60
0.10
0.47
1.50
0.00
0.29
Wages subject
to tax
$7,000
Wages Subject to Tax
Minimum State
Unemployment Tax
$7,000
$7,000
$9,000
$24,000
$8,000
$8,000
$30,900
$8,000
$10,500
$17,100
Maximum
state
unemployment
tax
6.10
State
Unemployment Tax
0.00
0.30
0.40
0.40
0.60
0.10
0.47
1.50
0.00
0.29
7.00
10.00
7.64
9.40
5.90
6.20
6.12
7.50
8.90
8.79
Source: CRS table compiled from Significant Provisions of State Unemployment Insurance Laws,
January 2006, U.S. Department of Labor, Employment and Training Administration, at
[http://www.ows.doleta.gov/unemploy/sigprojan2006.asp].
In FY2005, it is estimated that revenue exceeded outlays. State UTF revenue
exceeded outlays from FY1995-FY2000, but outlays significantly exceeded trust
fund revenue in FY2001-FY2004. However, in FY2005, UC revenue exceeds total
UC outlays. Table 3 lists the total revenue and outlays associated with the UC
program from FY2000 through FY2007 (estimated).
Table 3. Revenue and Spending Associated With
Unemployment Compensation (UC), FY2000-FY2007
(in billions of dollars)
UC revenue, total
FUTA tax
State UC taxes
UC outlays, total
Regular benefits
Extended benefits
Emergency UC
Administration
2000
27.1
6.9
2001
27.8
6.9
2002
27.5
6.6
2003
33.2
6.5
2004
39.3
6.6
2005
42.2
6.9
2006b
44.5
7
2007c
45.2
7.1
20.7
20.8
20.9
26.7
32.7
35.4
37.5
38.1
23.7
20.2
a
—
3.5
31
27.3
a
—
3.6
53.8
42
0.16
7.9
3.7
57.4
42
0.32
11
4.1
40.9
36.9
0.16
4.1
3.9
38.2
34.3
0
—
3.9
36.3
34.7
0.2
—
3.8
38.2
36.7
0.02
—
3.8
Source: U.S. Department of Labor, UI Outlook, January 1998-February 2006.
a. Less than $50 million.
b. Estimated for 2006.
c. Estimated for 2007.
Outstanding Loans from the Federal Unemployment Account (FUA).
If a state trust fund account becomes insolvent, a state may borrow federal funds.
Three states had outstanding balances in borrowed funds from the FUA as of
February 16, 2006: Missouri ($238 million), New York ($458 million), and North
CRS-8
Carolina ($59 million). Minnesota has requested loan authorization up to $50
million for March and up to $100 million for April.
CRS-8
Trade Adjustment Assistance (TAA):
Unemployment Benefit Extensions for Workers
Unemployed on Account of International Trade
The Trade Adjustment Assistance (TAA)TAA program, established by the Trade
Expansion Act of 1962 (P.L.
87-794) and now authorized by the Trade Act of 1974
(P.L. 93-618), as amended,
extends UC benefits and provides job training for
workers dislocated by import
competition.4
TAA Eligibility
To be certified for TAA eligibility, a group of workers or their former employer
petitions the Department of Labor (DOL)DOL, and DOL investigates whether import
competition “contributed
importantly” to their job loss or whether their firm has
shifted production of similar
products to certain countries. The new TAA also
extends eligibility to secondary
workers whose job loss results from the loss of
business with a primary firm.
Determinations should be completed within 40 days.
TAA Benefits and Duration
The income support portion of the TAA is a trade readjustment allowance
(TRA) benefit. The TRA benefit is identical to the UC benefit the worker would
have received under the regular UC program of the worker’s state. The TRA benefit
is available for 52 weeks, less any weeks in which regular UC or EB benefits are
received, plus an additional 52 weeks for claimants still in approved job training after
the basic TRA runs out. An additional 26-week extension is available to those in
need of remedial education. Therefore, the total period of unemployment benefit
receipt for a TAA certified unemployed worker — including regular and extended
UC benefits, as well as the TRA benefits — may last as long as 130 weeks.
Other Benefits. A new refundable and advanceable tax credit for 65% of
health insurance premiums is available to TAA eligibles for the purchase of
insurance through COBRA continuation coverage,5 high-risk pools, state employee
plans, or other means. An allowance of up to $1,250 may be paid to eligible workers
who must search for work outside their commuting area. Another $1,250 allowance
may be paid for the cost of relocation to another job market.
An alternative TAA (ATAA) for older workers, which replaces up to 50% of the
wage difference between the wages in a new job and the old one for up to two years,
4
For more information on the TAA program, see CRS Report 94-478, Trade Adjustment
Assistance for Workers: A Fact Sheet, by Paul Graney.
5
Under Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA,
P.L. 99-272), an employer with 20 or more employees must provide those employees and
their families the option of continuing their coverage under the employer’s group health
insurance plan in the case of certain events. For more details on the COBRA benefit, see
CRS Report RL30626, Health Insurance Continuation Coverage Under COBRA, by Heidi
Yacker.
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who must search for work outside their commuting area. Another $1,250 allowance
may be paid for the cost of relocation to another job market.
An alternative TAA (ATAA) for older workers, which replaces up to 50% of the
wage difference between the wages in a new job and the old one for up to two years,
was established by the Trade Act of 2002 (P.L. 107-210). The ATAA program went
into effect on August 6, 2003, and is intended to shorten transitions into new
occupations or industries without requiring older workers to participate in training
programs. Eligibility is limited to those over age 50 whose incomes are less than
$50,000 yearly, who work full time, and who find new jobs within 26 weeks after job
separation. The total benefit cannot exceed $10,000.
Extended Benefit (EB) Program
The Extended Benefit (EB) program, established by P.L. 91-373 (26 U.S.C.
3304), may extend UC TAA Financing
TRA and ATAA benefits are financed through the Federal Unemployment
Benefit Account (FUBA). TRA and ATAA benefit administrative costs are paid
from funds appropriated for TAA administration under the State Unemployment
Insurance and Employment Services Operations (SUIESO) account.
Extended Benefit (EB) Program
The EB program, established by P.L. 91-373 (26 U.S.C. 3304), may extend UC
benefits at the state level if certain economic situations within
the state exist.
Currently, the EB program is not active in any state. Louisiana was
the most recent
state to trigger the EB program on October 30, 2005. The EB
program for Louisiana
triggered “off” on February 25, 2006. Unemployed Louisiana
workers who
exhausted their regular UC benefits on or after October 30, 2005, and
before before
February 25, 2006, were eligible for 13 weeks of EB; unemployed Louisiana
workers workers
who exhausted their regular UC benefits after February 25, 2006, were not
eligible eligible
for the EB program.
EB Eligibility
The EB program is triggered when a state’s insured unemployment rate (IUR)6
or total unemployment rate (TUR)7 reaches certain levels. Each state’s IUR and TUR
are determined by the state of residence (agent state) of the unemployed worker
rather than by the state of employment (liable state).
EB Benefits and Duration
The EB program provides for additional weeks of UC benefits, up to a
maximum of 13 weeks during periods of high unemployment and up to a maximum
of 20 weeks in certain states with extremely high unemployment.
EB benefits on interstate claims are limited to two extra weeks unless both the
agent state (e.g., Texas) and liable state (e.g., Louisiana) are both in an EB period.
6
The IUR is the ratio of UC claimants divided by individuals in UC-covered jobs.
7
The TUR is the ratio of unemployed workers to all workers in the labor market.
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EB Financing
EB benefits are funded half (50%) by the federal government through its
account for that purpose in the UTF; states fund the other half (50%) through their
state accounts in the UTF.
Temporary Extended Unemployment Compensation
(TEUC) Program (Currently Expired)
Federal Temporary Extended Unemployment Compensation
(TEUC) Program. Congress acted five times — in 1971, 1974, 1982, 1991, and
2002 — to
establish a temporary program of extended UC benefits. None of these
programs was
in response to a disaster declaration. All of these programs had a
termination date,
some of which were extended multiple times. As of this writing,
there are no current
TEUC programs.
TEUC Benefits and Duration
These programs generally extend UC benefits for an additional 13 weeks and
have an expiration date for when the TEUC program would terminate.
Most recently, the Temporary Extended Unemployment Compensation (TEUC)
Program8TEUC program8 was enacted on March 9, 2002, as part of the
Job Creation and Worker
Assistance Act of 2002 (P.L. 107-147). The TEUC
program provided up to 13 weeks
of federally funded benefits for unemployed
workers who had exhausted their regular
UC benefits. In addition, up to an
additional 13 weeks were provided in certain high
unemployment states that had an
IUR of 4% or higher and met certain other criteria
(TEUC-X). P.L. 107-147 also
provided for a one-time $8 billion distribution to
states, known as Reed Act funds.9
TEUC benefits were payable to individuals who,
in addition to meeting other
applicable state UC law provisions
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filed an initial claim that was in effect during or after the week of
March 15, 2001,
exhausted regular benefits or had no benefit rights due to the
expiration of a benefit year ending during or after the week of March
15, 2001,
had no rights to regular or extended benefits under any state or
federal law, and
were not receiving benefits under Canadian law.
In addition, individuals must also have had 20 weeks of full-time work, or the
equivalent in wages, in their base periods. These temporary benefits ended on
8
For more information on this program, see CRS Report RS21397, Unemployment Benefits:
Temporary Extended Unemployment Compensation (TEUC) Program, by Celinda Franco.
9
For more information on the Reed Act, see CRS Report RS22006, The Unemployment
Trust Fund and Reed Act Distributions, by Julie M. Whittaker.
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December 28, 2002. However, the 108th Congress extended the TEUC program
twice (P.L. 108-18 and P.L. 108-26). Thus, TEUC eligibility was possible through
the week ending before December 31, 2003, and TEUC benefits were paid through
the week of April 3, 2004.
TUEC Financing
Generally, the TEUC programs were fully funded through the federal
government.
Disaster Unemployment Assistance (DUA)10
DUA benefits were created in 1970 by the Robert T. Stafford Disaster Relief
and Emergency Relief Act (the Stafford Act, P.L. 91-606). The Stafford Act
authorizes the President to issue a major disaster declaration after state and local
government resources have been overwhelmed by a natural catastrophe or “regardless
of cause, any fire, flood, or explosion in any part of the United States” (42 U.S.C.
5122(2)). Based on the request of the affected state’s governor, the President may
declare that a major disaster exists.
The declaration identifies the areas in the state eligible for assistance. The
declaration of a major disaster provides the full range of disaster assistance available
under the Stafford Act, including, but not limited to, the repair, replacement, or
reconstruction of public and nonprofit facilities; cash grants for the personal needs
of victim; housing; and unemployment assistance related to job loss from the
disaster.
DUA Eligibility
DUA benefits are available to individuals who have become unemployed as a
direct result of a declared major disaster. Workers who do not qualify for UC
benefits may be eligible for DUA benefits for 26 weeks. Also, if a worker qualified
for fewer than 26 weeks of UC benefits, the worker may qualify for DUA benefits for
the remaining weeks if the worker is unemployed for reasons directly attributable to
the disaster. A worker may not receive DUA and UC benefits at the same time.
The DUA regulation defines eligible unemployed workers to include
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the self-employed;
workers who experience a “week of unemployment” following the
date the major disaster began, when such unemployment is a direct
result of the major disaster;
workers unable to reach the place of employment as a direct result
of the major disaster and workers who were to begin employment
See CRS Report RS22022, Disaster Unemployment Assistance (DUA), by Julie M.
Whittaker for more information on this program.
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and who do not have a job or are unable to reach the job as a direct
result of the major disaster;
individuals who have become the breadwinner or major support for
a household because the head of the household has died as a direct
result of the major disaster; and
workers who cannot work because of injuries caused as a direct
result of the disaster.
DUA Benefit Determination and Duration
When a reasonable comparative earnings history can be constructed, DUA
benefits are determined in a similar manner to regular state UC benefit rules. For
example, self-employed persons would be expected to bring in their tax records to
prove a level of earnings for the previous two years. These records would take the
place of the employer-reported wage data for the workers that are used in UC benefit
determination. Likewise, workers who would otherwise be eligible for UC benefits
except for the injuries caused as a direct result of the disaster that make them
unavailable for work would receive DUA benefits of an amount equivalent to what
they would have received under the UC system if they were not injured and available
to work. In all cases, workers will receive a DUA benefit that is at least half of the
average UC benefit for that state and cannot receive more than the maximum UC
benefit available in that state.
DUA Financing
DUA benefits are federally funded through the Federal Emergency Management
Agency (FEMA) and administered by the Department of LaborDOL through each state’s
UC agency. The
states report the amount of DUA benefits that were attributable to
the disaster. The Department of Labor DOL
then transfers funds to the states from the
Federal Unemployment Benefit and
Allowance (FUBA) account. The Department
of LaborDOL is reimbursed for these funds by FEMA.
Legislative Issues in the 109th Congress
The 109th Congress considered many bills intended to mitigate the impact of
Hurricane Katrina on the unemployed. The bills would have extended and
supplemented UC benefits and DUA benefits.11 Congress also considered many bills
that would have transferred funds from the federal account within the UTF to certain
state accounts.
Congress enacted P.L. 109-91, the QI, TMA, and Abstinence Programs
Extension and Hurricane Katrina Unemployment Relief Act of 2005 on October 20,
2005. Section 201 of this law created a special Unemployment Trust Fund transfer
from the Federal Unemployment Account (FUA) for FY2006 to the state UTF
11
For more information on worker assistance for those affected by Hurricane Katrina and
on other bills introduced to aid these workers, see CRS Report RL33084, Unemployment
and Employment Programs Available to Workers from Alabama, Louisiana, and Mississippi
Affected by Hurricane Katrina, by Julie M. Whittaker and Ann Lordeman.
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from the Federal Unemployment Account (FUA) for FY2006 to the state UTF
accounts of Alabama ($15 million), Louisiana ($400 million), and Mississippi ($85
million). Section 202 allowed administrative funds received by any state to be used
to assist in the administration of claims for compensation on behalf of any other state
if a major disaster was declared with respect to such other state or any area within
such other state.
On March 6, 2006, Congress enacted P.L. 109-176, the Katrina Emergency
Assistance Act of 2006. Section 2 of this law extended DUA benefits for persons
eligible for DUA benefits under the Robert T. Stafford Disaster Relief and
Emergency Assistance Act by reason of Hurricane Katrina for an additional 13 weeks