Sequestration and Falling Unemployment Rate Force Changes to Maine’s Extended Unemployment Compensation Program Bookmark and Share

June 26, 2013

FOR IMMEDIATE RELEASE: June 26, 2013
Contact: Julie Rabinowitz, 207-621-5009

Beneficiaries in Tiers 2 and 3 will see a benefit reduction

AUGUSTA—Federally funded Emergency Unemployment Compensation (EUC) Program unemployment benefits that have already been reduced under the federal government’s budget sequester will undergo an additional sequester-related reduction as a result of Maine’s improving economy.

In May, Tier 3 beneficiaries—those in the last weeks of EUC eligibility—had their benefits end eight weeks early because of savings requirements imposed by the federal sequester. Now that the rolling three-month average of Maine’s unemployment rate has dropped below the 7 percent threshold, Tier 3 benefits will be eliminated entirely, forcing the sequestration-mandated savings to come out of Tier 2 benefit payments. Therefore, beginning the week of July 14, Tier 2 beneficiaries will only be eligible for six weeks of benefits instead of 14.

The federal sequester mandated that benefit cuts be implemented to achieve 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 gave states a handful of specific options to achieve the savings.

Under the option Maine could implement, benefit duration is reduced by eight weeks in the last tier the state is eligible to offer. The elimination of a tier of benefit eligibility because of an improving employment situation does not qualify as sequester savings.

In total, about 15,000 individuals are currently claiming unemployment benefits. The new reduction will affect about 1,100 of the 2,445 individuals currently collecting EUC Tiers 2 and 3 benefits. The last week in which a person currently collecting benefits under Tier 2 can establish a claim under Tier 3 is the week ending July 13, 2013. Starting with the week beginning July 14, 2013, a person entering into or collecting benefits under Tier 2 will be limited to a maximum of six weeks of benefit collection.

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 has again made available intensive services to support people who will be losing benefits earlier than they might have anticipated.

“Although we welcome Maine’s improving employment situation, we do understand that this will bring challenges to people in the affected tiers. To help them find 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 help these job seekers,” Paquette said.

“We will continue to do our best to connect everyone on unemployment with good jobs and encourage everyone to take advantage of these free services,” she emphasized.

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. Maine’s unemployment rates for March, April and May were 7.1, 6.9 and 6.8 percent respectively. As the unemployment rate decreases, the number of weeks of benefits a state may provide falls.

The total number of weeks a person claiming unemployment benefits in Maine could file for under all three tiers was 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 have provided up to 14 weeks of benefits each. Tier 3 provided up to nine weeks of benefits. Due to both sequestration and loss of Tier 3 because of an improving economy, the total number of EUC weeks available as of July 14 will be 20.

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.

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 . EUC data can be found under the extended benefits selection in the weekly unemployment claims data chart section.

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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.