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Long-term unemployment to be cut due to sequestration

Published 10:18am Thursday, April 4, 2013

Alabamians receiving Emergency Unemployment Compensation (EUC) benefits can expect to see a 12.8 percent reduction in benefits for weeks beginning April 28 through September 30.

The cuts are due to mandated federal budget cuts, known as sequestration, according to Alabama Department of Labor Commissioner Tom Surtees.

In most cases, Alabamians receiving regular unemployment compensation benefits, or those who have been unemployed for 26 weeks or less, will not be impacted by the cuts. This is because the State of Alabama is responsible for paying claims for up to the first 26 weeks with unemployment insurance taxes collected from employers. The federal government pays claims for benefits in excess of 26 weeks.

The dollar amount of the reduction could vary for each claimant, as the reduction will be calculated based on the claimant’s maximum benefit amount (MBA) and weekly benefit amount (WBA), both of which will have to be adjusted to reflect the cuts.

Taxes and other deductions will be applied to the new WBA. All EUC claimants will receive notification of their new monetary determinations by mail.

ADOL estimates that approximately 16,500 Alabamians are currently receiving federal EUC benefits.

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