90,000 Californians to lose unemployment pay in May…

Posted: April 26, 2012 in Money, People, Politics

California’s longest-term unemployed  — as many as 93,000 — will see a cutoff in jobless benefits in mid-May because the state no longer meets the federal threshold for emergency aid.

Photo by Paul Sancya, AP

Those losing their benefits are on so-called Fed-Ed, the last tier of extended unemployment benefits. Fed-Ed currently provides 20 weeks of jobless pay.

State eligibility for federal funds to pay the benefits is based on a complicated formula that compares the average unemployment rate for the last three months to the rate over the last three years.

The current rate must be 110% higher than the same period in the previous three years. Even though California’s unemployment rate actually edged up to 11% in March — third highest in the country — it was only 108% higher than the rate in the three previous years.

As a result, anybody collecting Fed-Ed will be cut off after May 12. After that date, most unemployed will be eligible only for 79 weeks of benefits instead of the current 99.

An estimated 3,000 may get a couple of additional weeks because of an adjustment in Tier 4 benefits, but most will stop getting unemployment checks in mid-May, said Loree Levy, an Employment Development Department spokeswoman. She said the EDD will begin sending out letters this week to those affected by the Fed-Ed cutoff to explain the changes.

Levy estimates about 100,000 other laid-off workers who would otherwise become eligible for Fed-Ed later this year, won’t get those benefits. In September, extended benefits will be reduced again to a maximum of 73 weeks.

July marks another critical juncture for unemployment. Congress only approved extended benefits through the end of 2012. So anyone who gets laid off after June will only be eligible for the state’s standard 26 weeks of unemployment compared to the 99 weeks now.

The newly unemployed “need to understand that, come July, they will not be eligible for these extensions,” Levy said.

California had just over 2 million unemployed workers in March. Of those, about 1.1 million are collecting benefits. (Some people, like the self-employed, are not eligible for benefits. More than 665,000 other Californians have exhausted their 99 weeks.)

The federal government first began providing Fed-Ed in March 2009, when employers were laying off hundreds of thousands of workers. Since then, 912,445 Californians have been paid a total of $5 billion in Fed-Ed aid, Levy said.

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