House Ways & Means Hearing on Moving from Unemployment Checks to Paychecks: Implementing Recent Reforms

On February 22, 2012, the President signed P.L. 112-96, The Middle Class Tax Relief and Job Creation Act, which extended and reformed Federally-funded unemployment benefits under the Emergency Unemployment Compensation (EUC) program for the remainder of 2012. The reforms to the permanent program include creating job search requirements for Federal benefits, permitting States to have flexibility to promote pro-work reforms, allowing screening and testing of certain UI applicants for illegal drugs, requiring reemployment eligibility assessments for the long-term unemployed, and requiring States to recover prior overpayments of UI benefits. Prior to their enactment, these reforms were the topic of a previous Human Resources Subcommittee hearing on moving from unemployment checks to paychecks in October 2011.

Also under the law, the unemployment rate thresholds and weeks of benefits available in various “tiers” of EUC will change in the coming months, resulting in fewer weeks of Federal benefits being paid, with those weeks increasingly focused on States with the highest unemployment rates. As a result, starting in September 2012, the maximum number of weeks of eligibility for UI benefits will have fallen from 99 weeks to 73 weeks, but only in States with unemployment rates above 9 percent.