Time Could Run Out for Unemployment Benefits, Unemployment Fund

By Jennifer Loren, The Oklahoma Impact Team

Unemployment Insurance Trust Fund

OKLAHOMA CITY -- More than 75,000 people are collecting unemployment benefits in Oklahoma. That has economists keeping a close eye on Oklahoma's unemployment trust fund. More than two dozen other states' unemployment funds have already gone bankrupt. Now those states are borrowing money from the federal government to pay their unemployment benefits.

"Well I think that it's something that we need to be concerned about and here at the commission we are. It is something that we're looking at," said Lynn Gray, Chief Economist for the Oklahoma Employment Security Commission.

Gray said Oklahoma is currently paying out between $9 and $11 million a week in unemployment benefits from the trust fund.

In just one year, the fund's balance has almost been cut in half. This time last year the balance was over $795 million. Now the balance is $441 million.

The unemployment insurance trust fund is basically the savings account where the state holds unemployment taxes collected from businesses. Gray said Oklahoma's trust fund, while it is being drained rather quickly, is solvent. He said it's one of the strongest funds in the country.

"The reason that a lot of states have exhausted their trust funds and begun to borrow is because they didn't have some of the laws in place that we have in Oklahoma," said Gray.

The future of the fund depends completely on the state's unemployment rate. Gray expects Oklahoma's unemployment rate to go down slightly this year, meaning the fund should grow. However he admits the state's unemployment coffers could get dangerously low if the unemployment rate increases. In that case, which he calls unlikely, the trust fund balance could reach a low of $7.8 million by next March.

"That's certainly a possibility. But it's not what we think will happen," said Gray.

Unemployment Insurance Deadline

Ella Alexander is one of 75,000 Oklahomans filing for unemployment benefits. After taxes she gets $377 a week. That's much less than she used to make, but something.

"It certainly has been a blessing having it. It's also been a struggle," said Alexander.

Workers at state unemployment offices see dozens of people like Alexander every day, trying to get their unemployment checks.

"Here lately we are just swamped. Some claimants come in and they have a two to three hour wait," said Stacy Dunagan with the Oklahoma Employment Securities Commission.

In fact there are so many unemployed Americans, Congress extended unemployment benefits three times last year. Each extension is called a "tier." But there is a little-known deadline for unemployed people to file for their next tier. It's February 27.

"Come the first week in March, basically, whatever monies that they're on, whether it be a state claim, first extension, second or third, that's it. Once they draw that money, it's exhausted. There's no more," said Dunagan.

Ella Alexander believed she had another year to collect unemployment benefits. But now that she's aware of the filing deadline she said she has just three months left.

"Nobody's ever said anything about it," said Alexander. "That's scary, very scary. So basically, I have three months to find a job."

There is still a chance that Congress will step in to extend that deadline. But, at this point, there are no plans for them to do so.

"I need to know because I have no other resources," said Alexander.

Explaining the Deadline

As part of the national Defense Appropriations bill, Congress made the filing deadline for unemployment extension claims February 21, 2010. This affects several aspects of the federal extension program. The impact on claimants depends on when someone started their regular Unemployment Insurance claim and when they are set to exhaust their current benefits.

• For those who run out of all of their state UI benefits on or before February 20, 2010, and remain unemployed and otherwise eligible, this bill makes you potentially eligible for the first extension or tier of unemployment benefits that provides up to 20 weeks of additional benefits. Eligibility for any further extension benefits beyond that will all depend on whether or not Congress decides to further push back the new extension deadlines.

• For those who run out of their first extension or tier of unemployment benefits on or before February 27, 2010, the bill will make you potentially eligible for the second tier of extension benefits. That second tier now provides up to an additional 14 weeks of benefits once someone fully exhausts the first tier extension. Eligibility for any further extension benefits beyond that will all depend on whether or not Congress decides to further push back the new extension deadlines.

• For those who run out of their second extension or tier of unemployment benefits on or before February 27, 2010, the bill will make you potentially eligible for the third tier of extension benefits. That third tier provides up to an additional 13 weeks of benefits once someone fully exhausts their second tier extension. Eligibility for any further extension benefits beyond that will all depend on whether or not Congress decides to further push back the new extension deadlines.

• For those who run out of their third extension of unemployment benefits on or before February 27, 2010, the bill will make a fourth tier of extension benefits available to eligible claimants. The fourth tier provides up to an additional six weeks of benefits once someone fully exhausts their third tier extension. In order to meet the newly revised filing deadline for the fourth tier, a claimant's eligibility for the third tier would have to have started on or before November 15, 2009. Only then, for a vast majority of this group of long-term unemployed clients, would there be enough time to start a third tier extension and use all 13 weeks of additional benefits available before February 27, 2010, which is the deadline for starting a fourth tier of extension benefits.