Unemployment Benefits: What You Need to Know About Recent Changes

New laws passed in Washington impose stiffer requirements and cut the length of unemployment insurance payments.

In addition to record hot weather, the summer of 2012 has also brought with it a raft of cuts to federal unemployment benefits. On the back of a cautiously recovering economy, Congress earlier this year voted into law several measures limiting these benefits.

Unemployment is a combined federal/state program financed from employer payroll taxes that are funneled to both entities. Each state runs its own jobless benefits program, operating within certain constraints set out by the federal government. The states also individually set the maximum period of time a person can receive state-funded benefits; most limit this to 26 weeks.

Once that period expires, the feds chip in to provide “extended” benefits, which as enacted in the recessionary days of late 1999 could last up to 73 weeks.

The recent legislative changes have cut those extended benefits. Now, they are more limited in accordance with the unemployment rate in a particular state; the lower the jobless figure, the shorter the extension. For example, the two states with the lowest unemployment numbers as of May 2012 (according to figures from the Bureau of Labor Statistics), North Dakota and Nebraska, each have a combined state/federal maximum of 46 weeks.  

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Meanwhile, Arizona and Kentucky, which at that time both matched the national jobless rate of 8.2%, were each cut to 73 weeks. Sluggishly recovering California, with its 10.8%, got a shallower cut to 79 weeks. But neighboring Nevada, with the highest unemployment rate in the country, gets to hold on to that old maximum of 99 weeks.

And those time periods won’t last. They are to be phased out towards the end of this year, when the cap will be set at 73 weeks.

The curtailment of benefit periods isn’t the only adjustment handed down from Washington. Another requirement being phased in is that a jobless person must visit their state’s One-Stop Career Center for an initial assessment of their situation and whether they are in compliance with the requirements for receiving benefits.

If that person remains unemployed past his or her state’s maximum benefits period and crosses into federal extension territory, several other rules kick in. Chief among these is that the beneficiary be able to prove upon request their work search efforts through documentation (emails, copies of letters, phone records, etc.); further, they are required to contact a minimum number of potential employers - such as three, in the case of California - per week. Additionally, the beneficiary must make certain they are properly registered in their state’s unemployment office in order to be listed for availability to work.

According to the government, these new, tightened laws put an emphasis on actively searching for work rather than idly waiting for a check to come around. The cuts in maximum periods for benefits could be particularly devastating for many of the nation’s many long-term unemployed; no doubt they’re hoping that their government’s stated goal will be met, and that their job prospects will rise accordingly.

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