Due to a decrease in the "insured unemployment rate" in Massachusetts, many people who lost their jobs in the wake of September 11 are prematurely being cut off from extended unemployment benefits that were part of a federal law passed in March. President Bush signed the economic stimulus package on March 9, 2002, which included the Temporary Extended Unemployment Compensation Act of 2002 (TEUC). Governor Swift responded immediately by enacting the TEUC in Massachusetts. She reduced the maximum number of weeks one may receive unemployment benefits, which previously was 30 weeks, to the federal standard of 26 weeks, then added the federal 13-week extension for a total of 39 weeks through the end of 2002.

The program President Bush signed, however, consisted of two "tiers" of extended benefits, including a second round of 13 week benefits. Tier II extended benefits were intended to be available to individuals who exhausted both their regular benefits and their "Tier I" extended benefits. However, the state must meet the criteria for "triggering" the Tier II program, which means a state must have an "insured unemployment rate" above four percent in order to be eligible to provide the Tier II extended benefits.

The "insured unemployment rate" is the number of people claiming unemployment divided by the number of people working in the state covered by jobless insurance. This differs from the more familiar unemployment rate, which is the number of unemployed people divided by the number of people in the labor force. Unlike the unemployment rate, the insured unemployed rate is not seasonally adjusted, prompting some economists and legislators to say Congress was wrong to rely on the insured employment rate to trigger additional benefits.

When the law was passed, Massachusetts, along with about a dozen other states, had insured unemployment rates above 4 percent. However, in May that rate fell below four percent in Massachusetts, and the state stopped offering the Tier II benefits on June 15. This effectively shut everyone who lost their jobs after September 11 out of the second 13-week extension since they had not yet used up their 39 weeks of benefits.

According to a June 11, 2002, memo released from the Massachusetts Department of Employment and Training, explaining why additional federal extended benefits program was ended, "it cannot – by federal law – start again for at least 13 weeks. This means that Massachusetts cannot begin another program of additional extended benefits at least until September 15, 2002." However, anyone who exhausts the basic extension of benefits after June 15 would not be eligible for a new program of additional benefits – even if one were to start in September. This is because, under federal law, individuals are eligible for an additional extension only if their basic extension of benefits ends while an additional extension is actually in effect.

According to the same memo, Tier I extended benefits are not affected by the change in the insured unemployment rate. That program will continue until it is scheduled to end on December 28, 2002.

For more information please see the MA Division of Employment and Training website:

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