How The Federal Unemployment Tiers Work

With unemployment rising quickly in 2008 then President George Bush signed a bill to approve the extension of federal unemployment compensation. That meant that the federal government would continue to provide money to dislocated workers who had exhausted their state benefits. The federal government breaks down levels of assistance into “tiers”. We started hearing about the “99ers”; people would qualify for 99 weeks of compensation. Many people wrongly assumed that anyone who was unemployed would receive 99 weeks of benefits. There are three important things to know about federal unemployment tiers and extended benefits.

The four unemployment tiers

The first thing you want to understand is the number of tiers and the number of weeks assigned to each tier. As of this writing in May 2011 there were 4 tiers, that are scheduled to be in effect, based on your state's unemployment rate, until January 3, 2012. Here are the numbers of weeks assigned to each Emergency Unemployment Tier:

EUC Tier I is for up to 20 additional weeks if you have exhausted regular UC benefits. This level is contingent on the phase out deadlines.
EUC Tier II is for up to 14 additional weeks and is contingent only on the phase out deadlines.
EUC Tier III is for up to 13 additional weeks if your state’s previous 3 month average is 6% or higher.
EUC Tier IV is for up to 6 additional weeks if your state’s previous 3 month average is 8.5% or higher.

This means that if you have exhausted your 26 weeks of state
unemployment benefits you are eligible to begin Tier 1 which would provide you up to 20 more additional weeks of compensation.

The second important factor is your own state’s unemployment rate. The reason you keep seeing the words “up to” is because these additional weeks of compensation are contingent on your state’s
unemployment rate, not just the country’s unemployment rate. You will be eligible for fewer tiers as your state's unemployment rate falls. Key milestones are at or above 8.5%, 6%-8.4%, and below 6%. For example, tiers will begin to phase out in your state as the unemployment rate moves from to 8.4% to and 5.9%. For example, Pennsylvania announced on March 14, that the three month average unemployment rate had fallen to 8.4%, thus the 6 weeks of Tier 4 benefits were being eliminated as of April 2, 2011.

Extended unemployment benefits

Thirdly, note that federal emergency unemployment benefits (EUC) are paid before state extended benefits (EB) are paid. EUC is a federal initiative. EB is a state initiative. If you have been unemployed long enough to exhaust your initial state benefits and then the various federal tiers of EUC, you may qualify for extended benefits through your state.

The
Pennsylvania Department of Labor and Industry explained it this way in February 2011, “The Pennsylvania UC Law was recently amended to increase the maximum amount of EB a claimant may receive if Pennsylvania enters a ‘high unemployment period,’ or HUP. A HUP occurs when Pennsylvania’s total unemployment rate reaches 8 percent. Pennsylvania's total unemployment rate has risen to the level necessary to create a HUP.”

“As a result of the HUP, if you were financially eligible for 13 weeks of regular EB, your financial eligibility is increased to 20 weeks. If you were financially eligible for 8 weeks of regular EB, your financial eligibility is increased to 12.8 weeks.”

If you have exhausted your federal unemployment tiers

In Pennsylvania, for example, if you’ve gone through all the tiers of federal unemployment compensation, and the average unemployment in the state for the last three months has been 8% or higher, you will qualify for 20 more weeks of benefits, at the same rate you have been receiving. If the three month average was 6.5% to 7.99% you would receive 13 weeks. These benefits are paid from the state.

 

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