The Unemployment Insurance (UI) system is designed to help families bridge the difficult financial challenges they face while between jobs. It provides important benefits for hundreds of thousands of families each month, but it still fails too many. California’s systems for determining UI eligibility and for funding UI benefits are out of date. As a result, California’s UI fund is flat broke and is currently sustained only through a federal loan. Outdated eligibility rules mean that 64,000 Californians who should qualify for benefits are being denied. Additionally, our standard for triggering on extended benefits in a recession is so difficult to meet that we risk turning away free federal funding for extended benefits.
As part of the stimulus package, California stands to gain more than $800 million in new federal funds for the UI system. To access those benefits, California simply needs to “trigger on” its extended benefits program. Unfortunately, the state’s trigger for beginning extended benefits is extremely difficult to meet, and even with overall rates of unemployment above 10%, California has yet to meet the standard. To take advantage of the federal offer, California needs only to lower its extended benefits threshold for the length of the federal benefits program.
AB X3 23 (Coto/Arambula) will enable California to draw down more than $800 million in federal aid for the unemployment insurance system by moving the state to an alternative base period. It will also temporarily lower the state’s threshold for authorizing extended benefits, allowing the state’s long-term unemployed to collect an additional 20 weeks of entirely federally-funded benefits.
AB 1298 (Coto/Arambula)will bring the UI fund back into bal¬ance by updating its funding base for the first time since 1983 – increasing the wage base for UI taxes and indexing that base to inflation. It will also increase the amount of part time work an individual can take on before losing unemployment benefits.
To download the entire "Stitching the Safety Net" report, please click here (pdf).
Contacts
- Sara Flocks, Policy Coordinator, California Labor Federation, (510) 663-4033