Differences Between Tier 1 & Extended Unemployment
In the context of state unemployment benefits, Tier 1 and Extended Benefits are different programs that expand recipients' eligibility period. Both kick in during times of high unemployment, when jobless workers likely need benefits for a longer duration because of the difficulty of finding work. Tier 1 is part of a four-tier program called Emergency Unemployment Compensation, which precedes the Extended Benefits program. Combined, the extensions allow recipients to claim benefits for almost 100 weeks in some states.
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Guaranteed Tiers
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As of 2011, Tier 1 benefits and Extended Benefits are extensions of state unemployment benefits programs that use temporary funds from the federal government. Tier 1 is the beginning of Emergency Unemployment Compensation, which lasts up to 53 weeks after a recipient exhausts the 26 weeks of regular state benefits. Tier 1 comprises the first 20 weeks of EUC and, along with Tier 2, is available in all states. With Tier 2 lasting 14 weeks, all recipients of unemployment benefits can get 34 weeks of EUC benefits after 26 weeks of regular benefits, for a guaranteed total of 60 weeks.
Additional Tiers
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In many states, a third and fourth tier of Emergency Unemployment Compensation are available. Recipients in states with an unemployment rate of 6.0 or higher can get a third tier lasting 13 weeks, while those in states where the unemployment mark is at least 8.5 can get another six weeks beyond that. These 19 weeks push the total number of EUC benefit weeks to 53. In April 2011, Tier 3 was available in all except five states plus the Virgin Islands. Tier 4 was available in more than half the states as well.
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Extended Benefits
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Recipients in many states can get 13 to 20 weeks of unemployment benefits after exhausting their regular and Emergency Unemployment Compensation benefits. In states with all four tiers of EUC plus 20 weeks of Extended Benefits, the total number of benefit weeks is 99. Similar to EUC, the availability of Extended Benefits hinges on the unemployment rate. Recipients in states with an unemployment rate of at least 6.5 have access to 13 weeks of Extended Benefits. If the unemployment rate is 8.0 or higher, the available amount rises to 20 weeks. Thus the states with access to the maximum 99 weeks of benefits are those in which the unemployment rate is 8.5 or higher.
Considerations
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One of the criteria for receiving unemployment benefits is searching for work and continuously remaining available to accept a suitable offer of employment. This requirement carries over into Tier 1 and the rest of Emergency Unemployment Compensation. Upon moving into Extended Benefits, the requirement can become stricter. States at that point can designate workers' prospects of finding employment as "not good" if opportunities in their chosen fields are slim, and these workers must expand their search to jobs with potentially lower pay or types of work they might not otherwise seek. Work search documentation and reporting standards also become more stringent while receiving Extended Benefits.
Future
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Access to Tier 1 and the rest of Emergency Unemployment Compensation expires at the end of 2011, unless Congress votes to continue federal funding for the program. In most states, the same holds true for Extended Benefits. Although Extended Benefits are a permanent part of state unemployment insurance programs, they normally become available only when the unemployment rate reaches an inordinately high number. Federal funding has allowed states to lower that number. About 10 states plan to maintain the lower triggering threshold after federal funding runs out, but in others, Extended Benefits will cease to be available for all practical purposes along with Tier 1 and the rest of EUC benefits.
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References
- U.S. Department of Labor: Emergency Unemployment Compensation 2008 (EUC08) and Federal-State Extended Benefit (EB) Summary Data for State Programs
- Center on Budget and Policy Priorities: Policy Basics: How Many Weeks of Unemployment Compensation Are Available?
- U.S. Department of Labor: Extended Benefits Questions and Answers
- U.S. Department of Labor: Emergency Unemployment Compensation (EUC) Extended to January 3, 2012
- Center on Budget and Policy Priorities;Emergency Unemployment Insurance Benefits Remain Critical for the Economy; Chad Stone, et al.; November 2010
Resources
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