Things are looking kinda unstable at work lately; we’ve lost probably 75% of our staff since December and clearly the survivors are nervous and looking for escape routes. My fiancé got laid off about a month ago, and is currently on State unemployment, so stress levels are understandably high at home right now. We’ll make it, one way or the other, but I have a question I don’t think I’ve ever heard the answer to.
It seems like every few months we hear about Dems and Repubs tangling over the “extension of unemployment benefits” out to something like 96 weeks or whatnot, but I have no idea what that really means. In Texas where we live, it’s a far shorter period of time. So what are “Federal” unemployment benefits? Is it a whole separate category from the State system, or are they compensating the states for what they pay out? If it’s a separate category, who qualifies and how do you apply? I personally hate the idea of having to use the system (I know, outdated Protestant work ethic and all that), but I understand why it’s there and unfortunately I may be in need of it sooner rather than later.
Extended unemployment benefits expired in December so no one is getting it now. Basically the Federal Government reimbursed the states for unemployment benefits beyond the states’ normal benefits–you just applied for the state benefits. Did you see this:
States each run their normal unemployment insurance program, but there have been Federal funded extensions during periods of high unemployment (Emergency Unemployment Compensation) That ended at the end of December 2013 because Congress didn't extend it. When it was in effect, people could receive unemployment for nearly two years instead of the usual six months or so. Eligibility was the same as for regular unemployment- these benefits just picked up when normal eligibility ran out.
Employers are required to pay payroll taxes for federal unemployment tax (FUTA) and state unemployment tax (SUTA) on a set amount of their employees wages. FUTA is currently paid on the 1st $7,000 of each employee’s wages each year. The FUTA rate is currently 6%, but if the employer timely pays their SUTA tax, they can get a reduction of that rate down to a minimum of 0.6% (Some states, called “credit reduction states”, do not get the full reduction in the rate due to outstanding loans to be repaid to the federal government, so employers in those states must pay higher FUTA rates, even after the reduction)
FUTA helps pay for state costs of administering each of their unemployment insurance and job work programs. Also, during periods of high unemployment, FUTA pays for 1/2 of extended unemployment benefits and provides a fund from which the states may borrow from, if necessary, to help pay their share of unemployment benefits.