Jobless won't lose extended benefits

Massachusetts officials, realizing that up to 85,000 jobless residents would soon exhaust their federal unemployment benefits, engineered a last-minute change in state law that ensures that the payments keep flowing. The change, which alters the way Massachusetts qualifies for federally funded extended benefits, allows those who do not find a job within 59 weeks to be eligible for up to 20 additional weeks of unemployment benefits.

Those added benefits could pump up to $650 million into the state’s economy.

The legislation was signed into law by Governor Deval Patrick earlier this month, only two days before 25,000 unemployed workers would have exhausted their federal benefits, according to the state’s Executive Office of Labor and Workforce Development. “Once we realized that thousands of people were going to be dropped from receiving their benefits, the executive and legislative branches worked hand in glove to fix the problem,’’ said state Labor Secretary Suzanne Bump. “Now, we are also poised to help people who might exhaust benefits over the next six months.’’

The state’s unemployment rate, which hit 8.6 percent in June, is at its highest level since September 1992, and economists expect it to peak above 9 percent sometime next year.

Unemployment benefits are granted for up to 26 weeks, and federal legislation passed last fall extended those benefits by another 33 weeks. If eligible, jobless workers can receive a second extension lasting 20 weeks, for a total of 79 weeks.

Massachusetts changed the standard used to determine whether residents are eligible for that second extension. It had been relying on the number of workers eligible for unemployment insurance - which does not include the self-employed and certain other workers - who are now jobless. When state officials saw that the unemployment rate among the insured could fall below 5 percent, the federal government’s minimum, they changed the law, relying instead on the percentage of all workers who are unemployed.The federal legislation passed last fall permits states to use the broader unemployment rate to qualify for the extensions.

On July 2, Patrick signed the change into law. Two days later, the number of insured workers out of work fell below 5 percent. If the law had not been changed, benefits would have stopped immediately for 25,000 unemployed people and, within the next six months for up to another 60,000, according to state labor officials.

Massachusetts offers the highest unemployment compensation in the nation, as much as $650 a week, although the average is about $400 a week.

-From: “Jobless won't lose extended benefits; State law change ensures 79 weeks of coverage; Late fix could add $650m to economy”, By Robert Gavin and Jenifer B. McKim, The Boston Globe,  July 21, 2009

http://www.boston.com/business/articles/2009/07/21/jobless_wont_lose_extended_benefits_in_mass/ retrieved 7/21/09.

 

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