Final Cut: Unemployment Compensation & Stimulus 2009

The White House has released the final language of the 2009 Stimulus plan, which will be known as the American Recovery and Reinvestment Act of 2009. The final number attached to the bill, at this stage just prior to signing, is $789 billion. The language of the plan is open for review at the White House website; click here to be taken directly there.

The difference this time is there is a form to the right of the PDF file documents that contain the stimulus plan. The site is encouraging comments, thoughts, and ideas. However, I doubt the President himself will actually read our thoughts, I will be sending my message later this evening.

A hot topic of the 2009 Stimulus plan is unemployment compensation and insurance. Unemployment rates are at an enormous high, and many Americans have already exhausted the Extended Unemployment Compensation that was given by the Bush Administration in 2008.

Extended Unemployment Compensation, or EUC, has two tiers. The first tier, Tier 1, is what most individuals were eligible to collect if they exhausted their regular benefits and were still totally or partially unemployed. The second tier, Tier 2, became available to individuals who had exhausted both their regular claims and their Tier 1 benefits. Tier 2 only becomes available to individuals in certain states when the state unemployment level reached a three-month average of 6%.

The American Recovery and Reinvestment Act of 2009, or Stimulus 2009 as most citizens call it, is giving relief to unemployed workers, to an extent. This is some of the stimulus plan's language, and what it means.

On Document 1:

"For an additional amount for "State Unemployment Insurance and Employment Service Operations" for grants to States in accordance with section 6 of the Wagner-Peyser Act, $400,000,000, which may be expended from the Employment Security Administration Account in the Unemployment Trust Fund, and which shall be available for obligation on the date of enactment of this Act: Provided, That such funds shall remain available to the States through September 30, 2010: Provided further, that $250,000,000 of such funds shall be used by States for reemployment services for unemployment insurance claimants (including the integrated Employment Service and Unemployment Insurance information technology required to identify and serve the needs of such claimants): Provided further, That the Secretary of Labor shall establish planning and reporting procedures necessary to provide oversight of funds used for reemployment services."

In short, this section of the stimulus means that $400,000,000 will be extended through the states, with $250,000,000 of the stimulus being used for reemployment services that are already offered by most state unemployment agencies. The bill does not discuss how the $400,000,000 will be divided up amongst the states.

On Document 2:

Sec. 1007. Suspension of tax on portion of unemployment compensation.

"In General. -- Section 85 of the Internal Revenue Code of 1986 (relating to unemployment compensation) is amended by adding at the end the following new subsection:

Special Rule for 2009. - In the case of any taxable year beginning in 2009, gross income shall not include so much of the unemployment compensation received by an individual as does not exceed $2,400.

Effective Date - The amendment made by this section shall apply to taxable years beginning after December 31, 2008."

Originally, I speculated this to mean that only $2,400 of unemployment benefits received in tax year 2009 would be counted toward an individuals Adjusted Gross Income. However, what it does mean is that the first $2,400 of unemployment compensation benefits would not be taxable, therefore will not be counted as taxable income.

Sec. 1832 Eligibility for unemployment insurance and program benefits while in training.

"Section 236(d) of the Trade Act of 1974 (19 U.S.C. 2296(d)) is amended to read as follows:

(d) Eligibility. - An adversely affected worker may not be determined to be ineligible or disqualified for unemployment insurance or program benefits under this subchapter -

(1)because the worker-

(A)left work-

(i)that was not suitable employment in order to enroll in such training; or

(ii)that the worker engaged in on a temporary basis during a break in such training or a delay in the commencement of such training; or

(C)left on-the-job training not later than 30 days after commencing such training because the training did not meet the requirements of subsection (c )(1)(B); or

(2) because of the application to any such week in training of the provisions of State law or Federal unemployment insurance law relating to availability for work, active search for work, or refusal to accept work."

Basically, in my opinion, this means that workers, who have left their job to receive training, such as to go to vocational school, would not be deemed ineligible for unemployment. Unemployment has been based on availability, and therefore many individuals attending some form of training were not available for work because the training hours did not allow it.

My translation of this section is that you may find yourself eligible for benefits if you lessen your number of hours worked per week, or leave your position, and can prove that you had to do so in order to be able to attend said training.

Subtitle A - Unemployment InsuranceSec. 2001. Extension of emergency unemployment compensation program

(a) In General - Section 4007 of the Supplemental Appropriations Act, 2008 (Public Law 110-252; 26 U.S.C. 3304 note), as amended by section 4 of the unemployment Compensation Extension Act of 2008 (Public Law 110-449; 122 State. 5015), is amended-

(1)by striking "March 31, 2009" each place it appears and inserting "December 31, 2009";

(2)in the heading for subsection (b)(2), by striking "March 31, 2009" and inserting "December 31, 2009"; and

(3)in subsection (b)(3), by striking "August 27, 2009" and inserting "May 31, 2010".

Previously, the last day a claimant could file an extension claim under the Extension Act of 2008 was going to be March 31, 2009. This section replaces that extension date to December 31, 2009.

It also changes the last week claimable. The last extension week claimable was going to be August 27, 2009, granted you had filed the claim before March 31, 2009. The 2009 Stimulus changes the last week claimable to May 31, 2010, granted that you have filed your extension claim before August 27, 2009.

Sec. 2002. Increase in unemployment compensation benefits

"(2) Additional Compensation - Any agreement under this section shall provide that the State agency of the State will make payments of regular compensation to individuals in amounts and to the extent that they would be determined if the State law of the State were applied, with respect to any week for which the individual is (disregarding this section) otherwise entitled under the State law to receive regular compensation, as if such State law had been modified in a manner such that the amount of regular compensation )including dependents' allowances_ payable for any week shall be equal to the amount determined under the State law (before the application of this paragraph) plus an additional $25"

Without all the political jargon, what this means that if your state decides to participate in the program, unemployment benefits would be raised by $25. Your particular state does have to participate, so not all unemployment claimants would get this extra $25, but the likelihood is in the claimants favor.

The last day to file a claim and receive the extra funds under the stimulus plan will be January 1, 2010. The last week payable will be the week ending June 30, 2010, granted that your claim was filed before January 1, 2010.

(The PDF files below contain the language of the final stimulus bill that President Obama is expected to sign this week. The pages do contain grammatical errors, side notes, and other 'scribbles'.)

Sources:

http://www.whitehouse.gov/the_press_office/arra_public_review/

http://www.house.gov/billtext/hr1_legtext_cr.pdf

http://www.house.gov/billtext/hr1_legtext_crb.pdf

http://www.house.gov/billtext/hr1_cr_jes.pdf

http://www.house.gov/billtext/hr1_cr_jesb.pdf