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Jobless benefits rules are tough to untangle

Congress' move to extend unemployment benefits for people out of work more than a year drew a heavy response from bewildered readers trying to figure out who is eligible. The Answer Desk.

The recent move by Congress to extend unemployment benefits drew a heavy response from bewildered readers who have been hearing conflicting stories about who is eligible and who isn’t.

That’s not surprising. The current program involves multiple layers of extensions for 50 separate state-run programs. To make matters worse, the latest round of extensions took so long to approve, the program is now running up against a Dec. 31 expiration created by an earlier round of extensions.

The hope is that Congress will extend that deadline and keep benefit checks flowing to the millions of people. Here is what you need to consider if you’re trying to apply for an extension of your benefits.

My husband … has been laid off since Dec. 19, 2008.  He was told by the state that although his previous extension was set to expire this week, he will receive another 13-week extension.  I am confused between the state and federal extensions.  Could you tell me exactly when his benefits with all of the current extensions will expire? 
— Dina M., Tuscon, Ariz.

The simplest way to untangle how the programs work is to start at the beginning.

Unemployment insurance is just that: Workers and employers pay into state-managed funds that provide benefits to people when they lose their job. All workers get regular unemployment benefits for 26 weeks. Eligibility requirements may vary somewhat, but in general you need to show that you are available for work and actively looking for a job.

Returning to school to train for a new job, for example, may eliminate your eligibility if your schedule doesn't allow you take a full-time job.

Once you've exhausted the initial 26 weeks of payments, you can qualify for additional benefits under various extensions and programs enacted since the recession began. There are now four "tiers" of extra benefits that provide 34 to 53 weeks of benefits. There’s also a separate "extended benefits" program that provides another 13 to 20 weeks of benefits.

The original Emergency Unemployment Compensation extension was enacted in July 2008 and expanded in November 2008. Under this program, anyone who had exhausted their initial 26 weeks of benefits was able to get an extra 20 weeks of payments. Workers in all states are eligible for these so-called “Tier I” extended benefits.

The law also created a separate “tier" for workers in states where the unemployment rate was higher than 6 percent. That “Tier II” program provided up to another 13 weeks of benefits in those states.

So far, so good.

Much of the current confusion arises from changes that were made as part of the American Recovery and Reinvestment Act (the "stimulus package") in February 2009. Under ARRA, Tier II benefits were expanded to include 14 weeks of extended benefits to workers in all states, regardless of the unemployment level. As a result, workers in all states became eligible for a 34-week extension (Tier I and Tier II).

But ARRA also included a provision ending all emergency extensions on Dec. 31, 2009. If you’ve applied for Tier I or Tier II by the deadline, you can continue to collect that tier for the full extension. But new applications for the next tier aren’t eligible after that deadline.

Fast-forward to this fall. With unemployment still rising, the House moved to extend benefits again in September. A lengthy Senate debate delayed enactment until November.

This new law created two new tiers. Tier III extends benefits for an additional 14 weeks in states with a jobless rate of 6 percent or higher. Currently workers in 20 states qualify. Tier IV should pay another six weeks of benefits to workers in states with an unemployment rate of 8.5 percent or higher. That would bring the total available to 20 additional weeks for workers who have exhausted both their regular benefits of 26 weeks and extended Tier I, II and III benefits of up to 33 weeks. All told, the hardest-hit workers could be eligible for 79 weeks.

But because the latest extension, originally written in September, didn't become law until November, many workers who sign up for Tier III benefits won't have exhausted that tier before that Dec. 31, 2009, deadline kicks in — ending all extended benefits.  To become eligible for the next tier, you have to have begun collecting before Dec. 31, 2009.

Congress is working on a fix to extend that deadline.

Finally, there’s a separate, extended benefits program that’s currently available in 39 states. This program pays an additional 13 or 20 weeks, depending on factors that include the current unemployment rates.

To pay for this extension, most states are relying on federal funding provided in the ARRA package that expires Dec. 31, 2009. Unless Congress extends that deadline before year-end, workers collecting under this program may lose their benefits.

To compound the confusion over eligibility, many states are so swamped with applications and claims that readers are reporting major delays in collecting benefits when they move from one tier to the next.

“How long it’s taking to get these benefits out the door is a whole other can of worms,” said Maurice Emsellem, co-director if policy at the National Employment Law Project, which has been tracking the various benefit extensions. “We have an infrastructure for the unemployment insurance program that was totally falling apart before this recession. And this recession has pushed them over the brink.”

Wait times in California, for example, are among the longest in the country, said Emsellem, up to six weeks. Other states, like New York and Connecticut, have already begun making payments under the November extension, he said.