Sequestration Forces Changes to Maine’s Extended Unemployment Compensation Program Bookmark and Share

April 30, 2013

FOR IMMEDIATE RELEASE: April 30, 2013
Contact: Julie Rabinowitz, 207-621-5009

Beneficiaries in Tier 3 will see a benefit reduction of eight weeks

AUGUSTA—Federally funded Emergency Unemployment Compensation (EUC) Program unemployment benefits are subject to reduction under the federal government’s budget sequester. Beneficiaries in the last weeks of EUC eligibility will be affected by the mandatory cuts, ending benefits about eight weeks early for those claimants in Tier 3.

The U.S. Department of Labor has mandated that benefit cuts be implemented no later than June 30, 2013, in a manner that achieves an overall savings of 10.7 percent of benefits for federal fiscal year 2013, which ends September 30, 2013. The U.S. Department of Labor mandated specific ways for states to achieve the savings, letting states choose from a limited set of options.

Under the option Maine has chosen to implement, EUC Tier 3 benefit duration will be reduced by eight weeks, leaving one week of benefit eligibility in Tier 3. The reduction is effective the week of May 12, and about 1,100 of the 5,800 individuals currently collecting EUC benefits will not be eligible for additional benefits beginning that week. Thereafter, the number of beneficiaries exhausting benefits each week will fall back to numbers similar to the pre-sequestration weekly figures of about 150 a week.

Although EUC beneficiaries are required to attend job-search workshops and to be continuously looking for, able and available to work, Commissioner of Labor Jeanne Paquette announced the launch of intensive services to support people who will be losing benefits earlier than they might have anticipated.

“In order to assist EUC beneficiaries to transition into jobs, the Maine Department of Labor, through its CareerCenter network and other service providers, has implemented an increased and focused array of CareerCenter job-search services and training to the affected participants,” Paquette said.

“The timing of the sequester reduction puts about 20 percent of current EUC beneficiaries in need of immediate employment at the peak of the summer hiring season. We will do our best to connect everyone on unemployment, no matter how many weeks they’ve collected, with good jobs,” the Commissioner said.

The number of EUC tiers a state operates under the EUC program is determined by a three-month average of a state’s unemployment rate. As the unemployment rate decreases, the number of weeks of benefits a state may provide falls. When Maine’s three-month average falls below 7 percent, the availability of Tier 3 benefits will end. Maine’s unemployment rate in March was 7.1 percent.

The total number of weeks a person claiming unemployment benefits in Maine can file for is 63 weeks. The state’s traditional unemployment system provides the initial 26 weeks of benefits, paid via the Unemployment Trust Fund. Those weeks are not affected by sequestration. EUC Tiers 1 and 2 provide up to 14 weeks of benefits each. Tier 3 provides up to nine weeks of benefits.

Both EUC benefits and the cost of their administration are federally funded. Congress authorized the continuation of the EUC program in the last-minute tax deal at the end of 2012 after leading many to believe that it would not be extended.

In January, in light of the federal government’s actions on the EUC extension and delay of sequestration, Commissioner Paquette sent a letter to all EUC beneficiaries urging them to take advantage of job-search services and training programs due to the uncertainty surrounding the program.

The U.S. Department of Labor offered several sequestration options to states after its initial plan proved unworkable for the vast majority of states. In reviewing these options, the Maine Department of Labor considered such factors as the number of Mainers receiving EUC benefits, the timing of the reductions, the number of available jobs on the Maine Job Bank and estimates of open jobs statewide, the CareerCenters’ capacity to assist EUC beneficiaries in May and June into training and new jobs, the cost to implement, and the requirements of the computer system used to manage the payment system.

More information on the EUC program in Maine is available at http://www.maine.gov/labor/unemployment/extended_unemployment.shtml .

Data on Maine’s 26-week state-funded unemployment benefits can be found here http://www.maine.gov/labor/cwri/ui.html . The charts and tables do not include EUC data.

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About Maine’s CareerCenters

CareerCenters, part of the Maine Department of Labor, offer a variety of workshops and services to help people find employment or upgrade skills. Each center provides several public-access computer workstations with Microsoft Office software, resume writing and cover letter software, Internet access and O’Net software for skills assessment. All CareerCenter services are free of charge.

Find your local CareerCenter by visiting our website, http://www.mainecareercenter.com .

Maine CareerCenters are an equal opportunity provider. Auxiliary aids and services are available upon request to individuals with disabilities.

Beneficiaries in Tier 3 will see a benefit reduction of eight weeks