Questions and answers on 2002 temporary extended unemployment benefits

U.S. Department of Labor
Employment and Training Administration Washington, D.C. 20210 Classification: UI Correspondence symbol: OWS/DUO Date: March 19, 2002

DIRECTIVE: UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 18-02

TO: ALL STATE EMPLOYMENT SECURITY AGENCIES

FROM: GRACE A. KILBANE
Administrator
Office of Workforce Security

SUBJECT: Temporary Extended Unemployment Compensation Act of 2002 - Questions and Answers

RESCISSIONS: None
EXPIRATION DATE: March 31, 2003

1. Purpose. To respond to questions concerning implementation of the TEUC program.

2. References. The Temporary Extended Unemployment Compensation Act of 2002, Title II of Public Law 107-147, signed by the President on March 9, 2002; Section 205 of the Federal-State Extended Unemployment Compensation Act of 1970, as amended; Section 233 of the Trade Act of 1974; 20 CFR Part 615 and UIPL No. 17-02.

3. Background. The Temporary Extended Unemployment Compensation (TEUC) program provides up to 13 weeks of 100 percent federally financed benefits to qualified individuals in all states and up to an additional 13 weeks in states that are in an Extended Benefit (EB) period or would be in an EB period using a 4% insured unemployment rate trigger.

This document gives questions and answers to help explain the Department's interpretation of the TEUC Act as set forth in the operating instructions published to guide states in implementing the TEUC program.

This advisory is issued to the states and cooperating state agencies as guidance provided by the Department of Labor in its role as the principal in the TEUC program.

4. Action Required. Administrators are requested to provide this information and instructions to the appropriate staff.

5. Inquiries. Inquiries should be directed to your Regional Office.

6. Attachment. Questions and Answers for Clarification of Title II of Public Law 107-147.

Attachment: Questions and Answers for Clarification of Title II of Public Law 107-147

Official attachment: https://www.dol.gov/sites/dolgov/files/ETA/advisories/UIPL/2002/UIPL18-02_Attach.pdf

1.   Administrative

    a. Question: When is the agreement between the state and
the Department of Labor effective? Is it effective with the
date the state authorizing official signs the document or are
both signatures required?

        Answer: The agreement takes effect after enactment
and both parties have signed. TEUC is payable beginning the
following week.

     2.   Question:     What is the first week payable for TEUC?

        Answer: The first week payable is the first week
which begins after the state enters into a TEUC agreement.

    c. Question:        What is the official name of the federal
extension?

          Answer:     Temporary Extended Unemployment Compensation
(TEUC).

    d. Question: How will states know which states are in a
TEUC EB period under the 4 percent trigger?

        Answer: The Office of Workforce Security will issue a
separate TEUC trigger notice identifying the states where
second- tier (TEUC-X) is payable.

    e. Question: Does a state have to do anything special to
declare that TEUC-X is payable under the state law based on
the
four (4) percent trigger?

        Answer: Yes. As is the case with the EB program, the
state must send a letter advising the department that it is
triggering “on” or “off” a second-tier period. The information
currently provided by the states on the ETA 539 report will be
used to issue the TEUC trigger notices.

    f. Question: When a TEUC EB period “OFF” indicator
occurs, does the state discontinue payment of TEUC to
individuals who have been determined eligible for TEUC-X

benefits?

        Answer: No. The ending of a TEUC EB period does not
affect the payment of TEUC-X to individuals who established
eligibility during the TEUC EB period. Section 203(c)
provides that an individual’s TEUC account shall be augmented
by an amount equal to the original TEUC account if a TEUC EB
period is in effect at the time of the original TEUC account
exhaustion. It doesn’t provide for termination of payments if
the period triggers off. The ending of the TEUC EB period
only affects determinations of entitlement to TEUC-X for new
exhaustees. Individuals who exhaust benefits with a week of
unemployment that ended after the TEUC EB period ended are not
eligible for TEUC-X.

    g. Question: For those states that currently have an
insured unemployment rate of 4 percent or above, what is the
beginning date of the TEUC EB period?

        Answer: The beginning and ending of the TEUC EB
Period is determined in the same manner as a regular EB period
using a 4 percent insured unemployment rate (IUR) in place of
5 percent. Therefore, the TEUC EB Period begins with the
third week that begins after the “ON” indicator and ends with
the ending of the third week ending after the “OFF” indicator.

    h. Question: If the state’s IUR would cause the TEUC EB
Period beginning date to precede the effective date of the
TEUC agreement in a state, does the mandatory 13-week “ON”
period begin with the earlier date or with the first week that
begins after the agreement is in effect?

        Answer: The mandatory 13-week “ON” period begins with
the earlier date, because Section 203(c) of the Act does not
affect the normal calculation of when the period begins and
ends.

2.   Claimants Potentially Eligible for TEUC

    a. Question: What is the universe of claimants who are
potentially eligible for TEUC?

        Answer:    In addition to meeting state law eligibility

requirements that are not inconsistent with the Act or
operating instructions, any individual with a benefit year
ending during the week of March 15, 2001 and thereafter who-

          (1) has exhausted all rights to regular
compensation;

          (2) has no rights to regular or extended
compensation under any state or Federal law;

          (3) is not receiving compensation under the Canadian
law; and who

          (4) filed an initial claim (new or additional,
including transitionals) for compensation during the week of
or after March 15, 2001. (This condition may be met with the
filing of an initial claim at any time up until the TEUC
program ends.)

   Example: The individual exhausted benefits with the week
   ending January 6, 2001, and his/her benefit year ended
   Saturday, June 2, 2001. The individual did not file an
   additional claim on that claim during or after the week
   that included March 15, 2001. If the individual files a
   new claim for regular compensation between the week of
   March 15, 2001 and the end of the TEUC program and is
   determined monetarily ineligible, he/she is potentially
   eligible for TEUC.

    b. Question: Are individuals who filed a new claim and
established a benefit year or filed an additional claim on an
existing benefit year, during or after the week of March 15,
2001, but received no payments before the benefit year ended
potentially eligible for TEUC?

        Answer: Yes, because the ending of the benefit year
prevents the individual from receiving the regular benefit
balance that was available. Therefore, the claimant is an

exhaustee for TEUC purposes.

3.   Applicable Benefit Year for TEUC Purposes

    a. Question: Does an individual with a qualifying benefit
year who is eligible for regular benefits on a subsequent
benefit year have the option to receive TEUC based on the
first benefit year?

        Answer: No. An individual with existing entitlement
to regular compensation is not an exhaustee for TEUC
qualifying purposes.

    b. Question: If an individual has two qualifying benefit
years on file and has exhausted the subsequent benefit year,
does
the individual have the option to receive TEUC based on the
first benefit year?

        Answer: No. The most recently exhausted benefit year
is the applicable benefit year for TEUC purposes under the
definitions published in UIPL No. 17-02.

    c. Question: Does TEUC entitlement exist for an
individual who received some TEUC before the end of his/her
benefit year and who fails to qualify on a new benefit year
because he/she has not earned requalifying wages?

        Answer: Yes. Individuals who are unable to qualify
for benefits on a subsequent benefit year because of a failure
to meet the requalifying wage requirements and who otherwise
meet the TEUC requirements will be eligible for TEUC. If the
requalifying requirements are met, the individual will no
longer meet the requirements for TEUC eligibility because
he/she would no longer be an exhaustee.

4.   Monetary Eligibility

    a. Question: Is there a uniform 13-week duration for
TEUC regardless of the regular claim maximum benefit amount
(MBA)?

        Answer: No. The TEUC MBA is computed as the lesser
of 50 percent of the regular MBA, including dependents’ allowance, or 13 times the average weekly benefit amount
(WBA). Fifty percent of the regular MBA may result in less
than 13 weeks of benefits.

    b. Question: If there has been a recent increase in the
state’s WBA that applies to all benefit years on file with a
balance, what impact does it have on the TEUC WBA and MBA?

        Answer: The individual’s TEUC WBA will be the most
recent regular WBA payable applicable to the individual. The
individual’s MBA will represent the lesser of 50 percent of the
total regular benefit MBA or 13 times the average of both WBAs
paid during the benefit year.

    c. Question: If an individual receives a monetary
penalty on his/her regular claim, is the TEUC claim figured on
the regular amount before or after the penalty (e.g., wage
cancellation or reduction of the MBA)?

        Answer: Before the penalty. Although Section
203(b)(1) of the Act requires that the amount in the TEUC
account equal the lesser of 50 percent of the regular benefits
payable or 13 times the average WBA, the Department has
consistently held that the determination of the monetary award
for federally-financed extensions should be based on the award
prior to the application of the penalty because to base
entitlement on the lesser redetermined amount would be
tantamount to imposing a second penalty for the same
disqualifying act. (Refer to 20 CFR 615.5(a)(1)(i) and
(b)(3)).

    d. Question: When a state is in a TEUC EB period, what
individuals qualify for the TEUC-X monetary determination?

        Answer: Under section 203(c)(1) of the Act, only those
individuals who exhaust the first-tier TEUC during the TEUC EB
period.

    e. Question: Does an individual who exhausts tier-one
TEUC prior to the TEUC EB period “ON” indicator qualify for the
second tier of TEUC?

         Answer: No. A claimant who exhausts TEUC during an
“OFF” indicator is not eligible for TEUC-X.

5.   Base Period Employment Requirement

    a. Question: Section 202(d)(2)(A) of the Act requires
that the claimant have 20 weeks of full-time insured work or
the equivalent in insured wages in order to qualify for TEUC
(and TEUC-X, since it is based on TEUC). Is this the same as
is required for EB?

        Answer: Yes. State law which satisfies the
requirements of 202(a)(5) of the Federal-State Extended
Unemployment Comensation Act (EUCA) of 1970 satisfies this
requirement.

6.   Seasonal Provisions/Between Terms Denial

    a. Question: Are employees of educational institutions
who are denied regular benefits because of the between-and-
within terms denial provisions eligible for TEUC?
        Answer: No. Section 3304(a)(6)(A) of the Federal
Unemployment Tax Act requires, as a condition of participation
in the Federal-State Unemployment Compensation program, that
state law prohibit, under specified circumstances, the payment
of benefits based on professional services performed for
educational institutions during such periods. Under section
202(d)(2) of the Act, the terms and conditions of the State
law, except where inconsistent with the Act or operating
instructions, apply to claims for TEUC. Therefore, the same
between and within terms denial provisions of state law apply
to TEUC claims.

7.    TEUC EB Period Trigger

    a. Question: Section 203(c)(2)(B) of the TEUC Act
provides for using a modified Section 203(d) of the EUCA to
determine a state’s TEUC EB period. Does Section 203(f) of
EUCA pertaining to the alternative total unemployment rate
also apply and provide a higher TEUC MBA (i.e., 20 times WBA)
during periods of a “High Unemployment Period”?

        Answer: No. If a state is in a TEUC EB period when a
claimant exhausts his/her first TEUC award, the claimant will
receive another TEUC award equal to the first amount. Under
TEUC, a claimant can potentially receive 26 weeks of benefits
which is greater than the 20 week MBA payable during a “High Unemployment Period.” Additionally, TEUC does not reduce EB
entitlement. Therefore, if, a claimant has exhausted all TEUC
or TEUC-X, and a state is in an EB period triggered under the
provisions of Section 202(d) of the Act, unmodified, or
Section 202(f) of EUCA, the claimant may qualify for EB.

8.    Work Search/Job Service Registration Requirements

    a.     Question:    Do the EB work search requirements apply to
TEUC?

        Answer: No.       The work search requirements of the
state law apply.

9.    Adjudication of Issues Arising Subsequent to Exhaustion

     a. Question: If an exhaustee with an existing benefit
year was separated from employment after exhaustion and before
the effective date of the TEUC program, is the state required
to adjudicate the separation issue?

           Answer: Yes.

10.    TEUC Benefit Intercept

      a.    Question:    Are TEUC payments subject to child support

intercept and similar levies and attachments?

         Answer: Yes. TEUC is an unemployment compensation
program. As stated in 6.a. above, the terms and conditions of
state law apply to TEUC, including intercepts and offsets,
except where inconsistent with the Act or operating
instructions.

     b. Question: What is the order of priority for
deductions of pension, overpayment offset, child support and
income taxes?

         Answer: The state will follow the same procedures
that apply to regular compensation. The state will first
determine the amount of UC that the individual is entitled to
for a week. This means that receipt of deductible income,
including retirement pay, will taken into account in
determining the amount payable for the week. Next, the state
must determine how much of the amount payable is to be
deducted and withheld to satisfy overpayments, intercept child
support, withholding of income taxes or other permissible
purpose. The Department’s position on the priority of
withholding is stated in UIPL 17-95, Change 1:

         . . . amounts required to be withheld under
   state law must be withheld prior to any voluntary
   withholding requested by the claimants. The
   Department continues to leave to the state the matter
   of priorities among amounts that are required to be
   withheld.

As a result, any overpayments or child support required to be
withheld must be withheld prior to any withholding of income
taxes.

     c. Question: May the state intercept and apply TEUC
benefits to an established UI tax delinquency?

        Answer:   No.   Refer to UIPLs 25-89 and 45-89.

11.   Overpayments

     a. Question: Is the waiver of overpayment for equity
and good conscience voluntary on the state's part or must the
state have a program to consider equity and good conscience?

         Answer: The waiver provision is voluntary on the
part of the state.

     b. Question: Does Section 206(c)(2) of the Act prohibit
the recovery of TEUC overpayments until the determination is
final under state law?

         Answer: Yes.

     c. Question: May TEUC benefits be offset to recover
state UI overpayments?

         Answer: Yes, if the state has a Cross-program
Overpayment Offset Agreement with the Secretary, TEUC may be
offset to recover state UI overpayments.

     d. Question: Must all offsets be 50 percent even if
state law requires a 100% offset of benefits?

         Answer: No. The Act provides that the 50% limit
applies only to offsets to recover TEUC. It does not apply to
offsets of TEUC to recover State UI overpayments. Section
303(g) of the Social Security Act (cross-program offsets) has
no 50% limit.

12.   Short-Time Compensation Program

     a. Question: May TEUC be paid to individuals
participating in a short-time compensation (STC or
worksharing) program?

         Answer: Yes. Nothing in the Act prohibits such
payments. If an individual participating in an STC program is
an exhaustee for TEUC purposes and is otherwise eligible, TEUC

can be paid to the individual. It should be noted that the
payment of TEUC to STC participants is unlikely to occur since
(1) STC exhaustions do not occur with a high frequency and (2)
an individual participating in an STC program whose benefit
year has ended will have wages that must be used to establish,
if possible, a new benefit year before any TEUC is payable.

13.  Extensions for Approved Training
     a. Question: If a state has a special extension for
individuals who exhaust regular compensation and are
participating in approved training, may TEUC be paid to these
individuals?

         Answer: Yes. For purposes of TEUC, these extended
programs are considered additional benefits. Under the Act,
TEUC is payable prior to any such additional benefits,
because, under section 202(b)(2) of the Act, exhaustion of
additional benefits is not required to qualify for TEUC.

14.    Self-Employment Assistance

     a. Question: May TEUC be paid to individuals
participating in a self-employment assistance (SEA) program?

         Answer: No. SEA is payable to individuals “in lieu of” regular UC (Section 3306(t)(1) of the Federal Unemployment
Tax Act), which means they have not, in effect, exhausted
regular compensation. As explained in UIPL 14-94,

      individuals who have exhausted regular UC are
      ineligible for SEA allowances. Individuals may not
      receive SEA allowances in lieu of Federal-State
      extended benefits (EB), additional benefits (AB)
      entirely financed by the state, any wholly funded
      Federal extension of UC, or other types of
      compensation not meeting the definition of regular UC.

However, if the individual has been terminated from or
voluntarily left the SEA program, and if otherwise eligible,
the individual may be paid TEUC since the individual is an

exhaustee for TEUC qualifying purposes.

15.   TEUC Effect on Trade Readjustment Assistance (TRA)

    a. Question: How does entitlement to TEUC affect the
payment of basic TRA.

         Answer: During the first benefit period (See 20
C.F.R. 20 617.3(h)) following the qualifying separation, a
claimant is potentially entitled to 52 weeks of basic TRA
minus regular, additional and extended compensation (including
federally financed extensions). Therefore, entitlement to
TEUC will reduce the basic TRA entitlement. In most cases,
the application of this requirement will result in a worker
receiving 26 weeks of regular benefits, followed by 13 weeks
of TEUC, followed by 13 weeks of basic TRA for a total of 52
weeks of benefits. However, if the state is in an EB period,
including one based on the substitution of A4" for A5" provided
for in section 203(d)(1)(B) of EUCA, the claimant’s basic TRA
may be further reduced by the second tier of TEUC.

    b. Question: This state has a large number of claimants
covered by TRA petitions. Some of the claimants have
exhausted their regular benefits and are currently receiving
TRA payments. Does the state have to set up TRA overpayments
and go back and start these persons in TEUC and exhaust that
prior to going to TRA?

        Answer: No. However, starting with the first week
which begins after the state has a TEUC agreement, the state
must suspend the payment of TRA until TEUC is exhausted and
TEUC is deductible from TRA entitlement, as explained in 15.a.
 Further, the receipt of TRA will not reduce the TEUC MBA,
because section 233(d) of the Trade Act (relating to the
reduction of EB entitlement because of the receipt of TRA)
does not apply to TEUC.

    c. Question: An individual exhausted regular benefits
and has received 5 weeks of TRA. The individual meets the
eligibility requirements for TEUC and the current week claimed
began after the state’s TEUC agreement became effective.

Should this claimant continue to be paid TRA until exhaustion
before being paid TEUC?

         Answer: No. Entitlement to TEUC requires that TRA
be suspended. Upon exhaustion of TEUC the claimant may be
entitled to resume TRA. For example, in this case, the
claimant has received 26 weeks of regular benefits and 5 weeks
of basic TRA. If the claimant is only eligible for 13 weeks
of TEUC, upon exhaustion he/she may resume receiving the
remaining basic TRA payable, in this case 8 weeks. The total
basic TRA payable is 52 weeks minus regular and extended
benefits, including federally financed extensions.

    d. Question: The claimant has exhausted 26 weeks of
regular benefits plus 26 weeks of basic TRA for a total of 52
weeks of basic TRA minus 26 weeks of regular benefits. The
claimant otherwise meets the eligibility requirements for
TEUC. Is this individual eligible for TEUC?

        Answer: Yes, if the individual meets all the TEUC
eligibility requirements. See operating instructions. TRA
reduces EB entitlement but not TEUC entitlement.

    e. Question: The claimant exhausted 26 weeks of regular
benefits on a first claim and received 10 weeks of TRA. The
claimant qualified for a second benefit year, therefore, the
payment of TRA was suspended. The claimant has now exhausted
all benefits available on the second claim and meets the
requirements for TEUC. After exhaustion of TEUC, are TRA
benefits payable?

    f. Answer: Yes, if the claimant meets all the TRA
eligibility requirements. The claimant will have a TRA
balance of 16 weeks. The TRA entitlement is not reduced by
the amount of TEUC because the TEUC is not attributable to the
first benefit period.

    g. Question: If TEUC is payable before TRA, will the
length of the basic TRA eligibility period or the additional
TRA eligibility period be lengthened?

        Answer: No. TEUC entitlement has no affect on the
determination of the period of eligibility for TRA established
under Section 233(a)(2) of the Trade Act.

16. Reporting Requirements

    a. Question:   How will TEUC claims and benefit activity
be reported?

        Answer: See the reporting instructions in UIPL
No. 17-02, Attachment A, Section VI.