UI Benefits

1
UI Benefits Taxes

• A Brief History and
• Program Description

2
History

• Unemployment Insurance was enacted in 1935 as
  part of the original Social Security Act.
• It was intended by Congress as an economic
  stabilizer in times of recession.
• Benefits were to be financed by employer taxes,
  as were the administrative costs of the program.

3
Major Premises

• Benefits
• To be paid to workers who were attached to the
  labor force.
• To be paid to workers who are able to work and
  available for work.
• To be paid to workers who are unemployed through
  no fault of their own.

• State UI Taxes
• To be assessed based on the employers experience
  with the program.
• Revenue to be placed in federally-held Trust Fund
  which can only be used to pay benefits.

4
Benefits I

• Claimant must be separated from employment
  through no fault of his/her own.
• Claimant must be able to work and available for
  work during each week for which benefits are
  claimed.
• Claimant must comply with reemployment program
  (exception claimants returning to last
  employer).

5
Benefits II

• Claimants must file their UI claims through the
  Claims Center using the Interactive Voice
  Response (IVR) system before interfacing with a
  claimstaker.
• Claimants must certify their continued
  eligibility for benefits on a weekly basis. This
  is done by telephone using the IVR system.

6
Benefits III

• Claimants monetary eligibility is calculated on
  wages earned in the base period which is the
  first four of the last five completed quarters.
• Benefit amount is based on a table listing ranges
  consisting of the total wages earned during the
  2.5 quarters of the highest earnings. If earnings
  during those quarters are less than 2795, the
  claimant will not be eligible for a benefit.
• Duration is calculated as a ratio of total wages
  during the base period divided by the wages
  earned during the quarter in which the highest
  earnings occurred. If that ratio is less than 1.5
  to 1, the claimant will not be eligible for a
  benefit.

7
Base Period Illustration
Lag Qtr.
2003 3rd
2003 2nd
2002 2nd
2002 3rd
2003 1st
2002 4th
Base Period
8
Benefits IV

• Weekly benefit can range from a minimum of 43 to
  a maximum of 312.
• Benefit duration can range from 12 to 26 weeks.
• Claimants can earn up to 60 of their weekly
  benefit amount without impact on their benefit
  amount. Thereafter, their benefit is reduced one
  dollar for every dollar of earnings up to their
  weekly benefit amount.
• See JobsND.com - Unemployment Insurance, Workers,
  Unemployment Benefit Chart for more information
  on calculating a weekly benefit.

9
Benefits V

• Eligibility issues
• Separation issues (voluntary quit termination
  for misconduct.)
• Non-separation issues (Disqualifying Income
  Failure to Report Illness and Disability
  Business Interest, etc.)

10
Taxes I

• Two methods for handling UI liability
• 1. Tax payments.
• 2. Reimbursement of Benefits Paid
• The latter is only available to non-profits,
  governments, and Indian Tribes.

11
Taxes II

• UI taxes are calculated based on the employers
  history with the program and the amount of wages
  paid by the employer.
• UI taxes are assessed on the first 18,000 for
  calendar 2003 of each employees annual
  earnings.
• Employers are grouped according to their history
  as either positive balance or negative balance
  employers.

12
Taxes III

• Employers pay their taxes on a quarterly basis.
  Employers who are liable for taxes must file a
  quarterly report even though they dont have
  taxable wages for that quarter.
• Delinquent employers are assessed, after the
  third quarter of each calendar year, with a
  higher negative balance rate for the next year.

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QUESTIONS???
14
More to Come.
15
The Numbers I

• Year FUTA Paid by ND UI/ES Admin. UI
  Portion of
• Employers (Est.) Grant
  Grant
• 13.4 Million 13.2 Million 7.6
  Million
• 13.7 Million 12.6 Million 7.0
  Million
• 13.9 Million 12.5 Million 6.9
  Million
• 14.2 Million 13.1 Million 7.5
  Million
• The ES portion (5.6 million) of the
  Administrative Grant has not changed during the
  past four years. The changes in the UI portion of
  the grant reflect the changes in workload
  occurring in North Dakota in that program.