News Column

NC Cut in Jobless Benefits Likely to Begin July 1

March 11, 2013

Travis Fain

Based on recent changes in state law, it will be better to lose your job this spring than it will come July.

Changes in unemployment benefits will mean lower maximum payouts to the unemployed -- and fewer weeks of state benefits.

But people who become eligible for unemployment benefits before a deadline -- probably July 1 -- will be grandfathered in, eligible for higher payouts and more weeks of benefits.

The result: People in similar circumstances around the state -- having lost similar-paying jobs weeks apart -- will get different-sized unemployment benefits for different lengths of time.

Under changes the legislature and governor approved last month, the maximum weekly payout falls from $535 to $350, and the maximum number of weeks that state benefits will be paid decreases from 26 to 20.

Larry Parker, spokesman for the N.C. Division of Employment Security, said the division expects to set the dividing line at July 1, right when the new rules go into effect.

Those qualifying for benefits before then won't see them cut to reflect the new payout, even after July 1 passes, Parker said.

But without an unlikely act of Congress, they won't be eligible for extended federal benefits, which have been paid after the state's unemployment benefits run out.

No one in North Carolina will.

Those benefits will simply be cut off July 1, the U.S. Department of Labor said.

The department estimates that this will affect 170,000 North Carolinians and that the state will lose $780 million in potential federal assistance.

The federal government had said states couldn't change their own payout structures this year and also keep those extra weeks of federal benefits.

North Carolina did anyway as part of an overhaul meant to speed repayment of the roughly $2.5 billion the state unemployment system owes the federal government.

That money was borrowed during down economic times when the state system ran dry.

The benefit cuts and other changes, including a temporary surcharge on North Carolina employers, were needed to make the system solvent again, according to Republican leaders who pushed the change through.

"The reality is, if we don't get it so we've got some fiscal integrity, it won't be available to anyone," said state Sen. Bob Rucho, R-Mecklenburg, a leading proponent for the changes.

Rucho and others who pushed for the debt fix have said they hope Congress will grant North Carolina an exemption so unemployed workers can keep the extended federal benefits.

But spokesmen for U.S. Sen. Kay Hagan and U.S. Sen. Richard Burr said that's not likely.

The operative language was in the hard-fought fiscal cliff bill, which passed at the beginning of this year.

The U.S. Department of Labor can't grant the exemption itself, department spokesman Michael D'Aquino said.

It will be the state's responsibility to notify workers of the coming loss of federal benefits, but that won't happen until the Department of Labor serves the state with formal notice, Parker and D'Aquino said.

A timetable to do so hasn't been set, D'Aquino said, but notice will come before July 1.

Source: (c)2013 the News & Record (Greensboro, N.C.). Distributed by MCT Information Services.

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