Unemployment Insurance Provisions in the American Recovery and Reinvestment Act of 2009

Abstract

[Excerpt] The American Recovery and Reinvestment Act of 2009 (P.L. 111-5, also known as ARRA or the 2009 stimulus package), contains several provisions affecting unemployment benefits, described below. • ARRA increases unemployment benefits by $25 per week for all recipients of regular unemployment compensation (UC), extended benefits (EB), emergency unemployment compensation (EUC08), Trade Adjustment Assistance (TAA) programs, and Disaster Unemployment Assistance (DUA). Supplemental compensation would be available from the time a state enters into an agreement with the Labor Secretary and ending before January 1, 2010 (with grandfathering). • The act extends the temporary EUC08 program through December 26, 2009 (with grandfathering), to be financed by federal general revenues. • It provides for 100• ARRA allows states the option of changing temporarily the eligibility requirements for the EB program in order to expand the number of persons eligible for EB benefits, to end before June 1, 2010. • It provides for an additional 13 weeks to the maximum amount of time railroad workers may receive extended unemployment benefits. • The legislation suspends income taxation on the first$2,400 of unemployment benefits received in 2009, for taxable years beginning after December 31, 2008. • It provides relief to states from the payment and accrual of interest on federal loans to states for the payment of unemployment benefits, from enactment of the stimulus package on February 17, 2009 through December 31, 2010. • ARRA provides for a special transfer of up to $7 billion in federal monies to state unemployment programs as “incentive payments” for changing certain state UC laws. All incentive payments must be made before October 1, 2011. States do not need to repay these sums to the federal government. Any changes that states make to state unemployment programs as a result of ARRA’s modernization provisions would be permanent. • Finally, the act transfers a total of$500 million to the states for administering their unemployment programs, within 30 days of enactment of the 2009 stimulus package. States do not need to repay these sums to the federal government. This report addresses some of the more common questions about unemployment insurance in the 2009 stimulus package. This report does not provide operational details of unemployment insurance programs such as UC, EB, or EUC08, nor does it address the TAA or DUA programs