​Jobless Benefits Cut: Unemployment Benefits Drop Amid Federal Budget

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July 7, 2013

The jobless will lose benefits due to federal budget cuts known as sequestration as the average weekly unemployment payment drops to $246 from $289, further tightening an already difficult situation for workers who have been out of the workforce longer than six months.

In Missouri, long-term recipients of the Emergency Unemployment Compensation benefits are getting no checks at all for the weeks of June 1, July 27 and Sept. 21. The average weekly EUC benefit in Missouri is $224.

In Illinois, the average benefit was cut $53 because of sequestration, or nearly 17 percent, to $316 a week.

“A family struggling to somehow stay afloat on the average weekly benefit of $289 — before the sequester reductions — is seeing its monthly payments cut by $172,” said Christine Owens, executive director of NELP. “That alone can be the difference between making — or not making — a rent, car or mortgage payment.”

The federal budget cuts took effect in March, slicing $2.4 billion from the benefits paid to the long-term jobless under the Emergency Unemployment Compensation (EUC) program. The federally funded program pays jobless benefits to unemployed workers who have exhausted state unemployment benefits, which typically have a 26-week limit.

States made cuts to their jobless programs in the months after the sequester was triggered, with the deepest reductions hitting in May and June, according to NELP. The states implemented those cuts differently, with some reducing benefits based on how long recipients have been receiving them and others designating weeks when no benefits will be paid.

Although the overall $30 billion in cuts to domestic non-defense spending have gone largely unnoticed by many Americans, the cuts in jobless benefits are taking vital dollars from the long-term unemployed and have affected 3.8 million households, according to NELP.

The states with the highest-percentage reductions for EUC benefits are New Jersey, where payments are down 22.2 percent; Maryland, where they were down 22 percent; Montana, down 19.6 percent; and Connecticut, where they were slashed by 19.2 percent.

In North Carolina, lawmakers chose to end all federal EUC benefits on July 1. The move cut off emergency jobless payments to an estimated 70,000 people, even though the state has the fifth-highest unemployment rate in the nation.