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What Is Unemployment Extension? How Does It Work?

What Is Unemployment Extension? How Does It Work?

What Is Unemployment Extension How Does It Work

A situation of unemployment extension occurs when the US Federal Government decides to extend additional weeks when unemployment benefits are exhausted. The government takes such steps when there is a situation of high unemployment in the country or any particular part of the country. When the unemployment rate increases above a particular threshold, only then the State government can provide benefits.

In this article, you will learn about what are unemployment extensions that the government provides. In addition to that, you will also learn the steps that the federal government takes to provide extended benefits to the unemployed. You will also learn about the types of programs that come under the purview of unemployment extension benefits. Hence, to learn more, read on through to the end of the article.

What Is Unemployment Extension?

When regular unemployment benefits are over, an individual might get an unemployment extension for some additional weeks. The Federal government of the United States creates unemployment extensions by passing a new legislation bill from time to time. This bill is also called the Unemployment Extension Bill.

However, every unemployment extension bill is passed at times to deal with situations when the rate of unemployment is high or above average. The government sets a date range for unemployment extension along with the bill so as to estimate the federal cost required for this benefit.

According to,

The federal-state unemployment insurance (UI) system helps many people who have lost their jobs by temporarily replacing part of their wages. Under certain circumstances, unemployed workers who exhaust their regular state-funded unemployment benefits before they can find work can receive additional weeks of benefits.

After the unemployment extension expires, the government proposes new legislation and passes that to further extend this extension as needed. However, before that, the government always re-evaluates unemployment extension based on data. You have to understand that the government only extends those benefits when unemployment is above a certain threshold in the country or any part of the country.

How Does Unemployment Extension Work?

The standard unemployment compensation in the United States is of 26 weeks. This compensation is called “Regular Unemployment Insurance Benefits (UI).” This program is provided for workers who lost their jobs. Furthermore, the maximum benefit duration of these insurance benefits also increases in some states.

However, unemployment insurance extensions are not heavily concerning across the US due to the presence of stringent policies that state unemployment agencies have enacted. This was done to ensure that the unemployed individual continuously applies for jobs rather than depend on unemployment insurance. The state unemployment agencies also wanted to motivate individuals to always stay prepared while they are applying for jobs.

What Are The Programs Under Unemployment Extension?

The US offers three programs to extend unemployment benefits:

1. Emergency Unemployment Compensation

This program was created back in 2008, and the government modified the program multiple times. According to the Department of Labor, “Most recently, the American Taxpayer Relief Act of 2012 (P.L. 112-240) extended the expiration date of the EUC program to January 1, 2014. To date, Congress has not passed any further extensions.

This is a type of unemployment compensation that the federal government funds a hundred percent. The goal of the program is to provide benefits to individuals whose regular state unemployment insurance benefits have been exhausted.

2. Extended Benefits

According to the United States Department of Labor,

Extended Benefits are available to workers who have exhausted regular unemployment insurance benefits during periods of high unemployment. The basic Extended Benefits program provides up to 13 additional weeks of benefits when a State is experiencing high unemployment.”

There are many states that have enacted similar programs at the local level to pay for up to seven weeks. However, the maximum number of weeks for unemployment extension can only be twenty. The states only consider extending their benefits only when the level of unemployment gets really high, and the federal extensions are not enough.

The extended benefits for an individual start after the individual exhausts his unemployment insurance benefits. These benefits exclude other benefits like Disaster Unemployment Assistance or Trade readjustment Allowances.

Furthermore, just because someone is qualified for regular benefits does not mean he is qualified for extended benefits. If you want to know whether you are eligible for extended benefits, you will need to contact the State agency near you.

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The extended benefits amount that an individual receives is the same as the amount that the individual receives while being employed.

If your local state starts an Extended Benefits Period, and if you are eligible to receive extended benefits, you will get notified by the state. You can also contact your State Unemployment Insurance Agency to ask about the availability of the benefits.

3. Pandemic Emergency Unemployment Compensation

According to Investopedia,

Pandemic Emergency Unemployment Compensation (PEUC) was an emergency program designed to help Americans affected by the COVID-19 pandemic by extending the number of weeks the unemployed could collect benefits. […] After a series of extensions, the program expired on September 6, 2021.

This program was established as per the provisions of the CARES Act, which was a $2 Trillion stimulus package for the purpose of the COVID-19 emergency. The Trump government brought in the law. The program’s goal was to help unemployed workers who lost their jobs due to the coronavirus pandemic.

As per this program, people who have exhausted their unemployment compensation benefits. The program states that they would receive benefits for up to thirteen additional weeks. However, they would need to ensure that they are able to work, available for work, and are actively seeking work.

Bottom Line

Hope this article was helpful for you in getting an understanding of what unemployment extension is and what are the programs under it. The government considers providing unemployment compensation when an individual exhausts his/her retirement benefits. However, to get an extension, the individual needs to be eligible. Do you think that unemployment extension really helps to lower the unemployed? Share your thoughts with us in the comments section below.

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