Jobless benefits will disappear for thousands of Arizonans in the next few months, the combination of a change in federal law and the state’s improving unemployment situation.
Until now, the federal government had been funding a program which allowed those who have been unable to find work to collect benefits for up to 89 weeks. That includes the 26 weeks of basic benefits paid for by state employers, with the balance picked up by Washington.
But the legislation says those who have exhausted the first 79 weeks of benefits will be able to get continued aid only in states with an unemployment rate averaging at least 8.5 percent from March through May.
The problem is that while Arizona’s jobless rate was 8.6 percent in March, it dropped to 8.2 percent in April. Officials at the Department of Economic Security figure the May rate, to be announced later this week, would have to jump to at least 10 percent to qualify, something they do not expect to happen.
DES estimates that about 700 people each week exhaust their 79 weeks of benefits.
That, however, may be only the beginning of problems for the long-term unemployed.
Federal law divides extended benefits into four tiers.
The first provides an extra 20 weeks beyond what states offer.
Tier 2 adds another 14 weeks, with 13 weeks more in Tier 3.
That last level, Tier 4, is what is disappearing, with no one new allowed into that program as of the beginning of this month, though about 11,000 already in the program will continue to get that last 10 weeks of benefits unless they find work elsewhere.
Mark Darmer who runs employment and rehabilitation services for the Department of Economic Security, said there are other things in the federal law which could trim benefits even more.
First, Arizona could lose its Tier 3 eligibility if the state’s average unemployment rate drops to 7 percent over a three-month period. Darmer said there is “some chance that the unemployment rate will improve” to meet that number and these benefits will disappear, too.
And even if the average jobless rate is still at least 7 percent by September, the extra 13 weeks in Tier 3 will shrink to 9 weeks.
Finally, the maximum extended benefits will shrink to 37 weeks by September no matter what — and 28 weeks if the jobless rate subsequently drops below 7 percent.
About the only good thing is that Arizonans are likely to keep getting at least that 28 weeks beyond the basic state benefits, as the state’s jobless rate would need to drop to 6 percent to lose further federal help.
“We believe it is unlikely that the state will lose Tier 2 benefits,” Darmer said. And the federal law, while shrinking Tier 1 benefits to just 14 weeks, contains no provision to have them disappear — at least not before the end of the year.
There are currently more than 89,000 Arizonans who are collecting some kind of jobless benefits. Darmer said about half are in the first 26 weeks of state-paid benefits, with the balance getting some form of federally funded extended benefits.
Even with all the federal programs, which at one time extended to 99 weeks, the length and depth of the recession has outlasted many: Darmer estimates that more than 100,000 Arizonans have exhausted all of their benefits without finding work.