Michael Bolton: Well, technically it did work.
Peter Gibbons: No it didn't!
Samir: It did not work, Michael, okay?
Michael Bolton: Okay! Okay! Okay!
Samir: Okay?
Michael Bolton: Okay! I must have put a decimal point in the wrong place or something. ****! I always do that. I always mess up some mundane detail.
Peter Gibbons: Oh! What is this fairly mundane detail, Michael?
Michael Bolton: Okay, quit getting pissed at me, all right? This was all your idea, asshole!
Peter Gibbons: All right. Okay. All right. Let's try not to get pissed off at each other, all right? Let's just calm down. Let's try to figure this thing out together.
While mundane details can be difficult to endure, they are none-the-less essential to the success of most all endeavors. In an effort to avoid retrospective hysteria, today I will start a 3 part blog series outlining the specific details of eligibility, payment amounts/duration of benefits, and a repayment system.
To preface, the specific changes listed below only apply to a nationalized unemployment system functioning as the quinary safety net behind:
- Individuals, friends/family, private charities, and local/state governments.
Second, consistent with serving as a quinary safety net, my proposed changes are NOT designed to cover worst case scenarios. Rather they aim to provide a reasonable amount of support in the event of higher level system failures (individuals, friends/family, private charities, local/state governments).
Meet Goofy. Goofy was one of many laid off employees from Springfield’s Nuclear Power Plant (NPP) following growing animosity towards nuclear power after Japan’s Fukushima's nuclear meltdown and the country’s prolonged recession.
Goofy, being a wise man, had personal savings stored for a rainy season. However, Goofy has burned through all of his savings and exhausted available aid from friends and family. Local private charities have been overrun by high demand for assistance and with only 1 dependent, Goofy is not a priority candidate for local private charity funds. Local and state governments are running record deficits and Goofy has exhausted the paltry 4 weeks of benefits given by local and state governments.
Goofy thus arrives to our office requesting information on national unemployment assistance. We need to determine:
- Is Goofy eligible?
- How much assistance does Goofy qualify for?
- For how long?
Eligibility -
One tool in our kit to prevent waste, fraud, abuse, and misuse of public funds earmarked for unemployment assistance is to reduce utilization through use of qualification criteria.
While I am a proponent of implementing qualification criteria, as detailed in Unemployment Assistance Part V: Proposed Changes it is my aim to increase the number of individuals eligible for assistance as compared to our current unemployment insurance system, not tighten restrictions to eligibility.
Is Goofy eligible?
1) Does individual have document loss of taxable income in last 12 months?
I believe it is a reasonable and realistic expectation for an individual to modify their standard of living and find new employment in 1 year’s time. Again, national unemployment assistance is designed to function as quinary safety net and is not designed to cover worst case scenarios. Higher level safety nets (private charities, local/state governments, etc.) would be encouraged to provide additional benefits as they deem prudent.
2a) Did individual earn > $2600 at places of lost employment in 12 months prior to last pay date and/or projected to lose > $2600 in earnings in the next 12 months?
2b) Was individual employed for > 8 weeks?
Administrative costs are associated with running an unemployment system. Similar to actual payments, administrative costs primarily come from public funds. In an effort to reduce administrative costs, individuals would need to have a significant loss of income. I have defined a significant loss of income as loss of a single 8 hour shift, once a week, for one year’s duration at minimum wage or greater:
- $2668 = $7.25 / hr x 8 hours x 46 weeks
- Amount earned in 1 year if person worked 8 hours a week for 46 weeks (6 weeks vacation/sick leave) at minimum wage ($7.25).
How are individual earning amounts calculated? I was hoping you wouldn't ask… (very confusing calculation)
First, determine last pay date or self-disclosed last pay date prior to cut hours. Then sum actual or projected loss of earnings.
Case 1: Lost employment in full
Look back period - Furthest back of 12 months or first pay date
- Sum earnings, must be > $2600
Case 2: Retained employment, but hours reduced
Have individual determine "last pay date before cut hours"
- Look back 8 weeks prior to "last pay date before cut hours" for calculation of initial average weekly wage (AWWinitial)
- AWWinitial = sum of earnings / 8 weeks
- Next, sum earnings after identified "last pay date before cut hours" and divide by number of weeks following determined "last pay period before cut hours" (AWWnew)
- Take AWWinitial - AWWnew x 52 weeks = Projected loss of income over 1 year
- This must be > $2600
- Estimated loss of income over course of 1 year must be greater than $2600 to be deemed eligible
3) Has individual reached maximum lifetime assistance limit of $7200?
Functioning as a quinary safety net, national unemployment assistance is neither designed to provide indefinite benefits, nor cover worst case scenarios. Rather, it is purposed to provide a reasonable amount to accommodate a change in standard of living and/or transition into new employment.
- $600 = $15 / hr x 40 hours / week
- $7200 = $600 x 12 weeks
- Lifetime limit is set to provide maximum weekly benefits ($600/week) for 12 weeks. An indirect duration cap of 52 weeks is also set by measure of only including replacement of lost income in last 12 months. After 12 months from last pay date, individuals are no longer eligible for assistance for that particular past employment (would be eligible for unemployment benefits from other losses of taxable income in the preceding 12 months).
Why a set amount rather than a set duration?
Currently, U.S. unemployment insurance uses a combination of a flat maximum weekly payment ($610 for Minnesota - see Unemployment Assistance Part III: Current System) and a flat duration recipients are eligible to receive payments (typically 26-40 weeks, but has been up to 99 weeks – see Unemployment Assistance Part III: Current System).
I believe in the principle of those who have been given much, much will be expected. Thus, I am a proponent of keeping the flat maximum weekly payment, but rather than a flat duration of benefits to be received, I favor a maximum lifetime dollar limit. I feel a flat dollar amount is more equal and just than a flat duration.
A person making $7.25 an hour should be able to receive the same amount of maximum lifetime assistance than a person making $35 an hour. I feel this way as I believe the person making $35 an hour has a greater responsibility, expectation, and ability to steward their resources well and be in a position to either
- Downsize expenses quickly or
- Save a greater amount
4) Is individual sufficiently competent to work?
If individuals are deemed unable (unwilling does not qualify) to competently perform activities needed to successfully work, they will be directed to disability assistance.
Goofy -
- Loss of taxable income in last 12 months – yes
- Amount earned in last 12 months of employment > $2600 – yes
- Earnings at Springfield NPP 12 months prior to last pay date - $20,800
- Current outstanding assistance balance < $7200 - yes
- Outstanding balance – $1600
- Able to work – yes
Even though we have determined Goofy is eligible for national unemployment assistance, many questions remain to be answered: How much aid is Goofy eligible to receive? How long may Goofy receive aid? What responsibilities does Goofy have if he chooses to receive aid?
In preparation for additional details of proposed changes to the unemployment system, I encourage you to write out your answers to the a fore mentioned questions as well as answering for yourself the dilemma of who is and who is not eligible to receive unemployment assistance.
Next Post Topic: Unemployment Assistance Part VII: Payment Details
