Unemployment Assistance Part VI: Eligibility Specifics

Peter Gibbons: Michael! Michael! You said the thing was gonna take two years! What happened? You said the thing was supposed to work.
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 

1. Downsize expenses quickly or
2. 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 -

1. Loss of taxable income in last 12 months – yes
2. Amount earned in last 12 months of employment > $2600 – yes
1. Earnings at Springfield NPP 12 months prior to last pay date - $20,800
3. Current outstanding assistance balance < $7200 - yes
1. Outstanding balance – $1600
4. 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

Unemployment Assistance Part V: Proposed Changes

Very few of us enjoy change. It often forced upon us rather than a path we choose and I for see the crushing burden of our nation’s debt forcing change upon our public assistance programs, including our unemployment system.

Even though our nation’s debt may serve as the impetus for change, as detailed in Unemployment Assistance Part I, federal unemployment insurance constituted only 4.2% of total federal expenditures ($156 billion), and 11.3% of welfare expenditures in 2012. Thus, my proposed changes to the unemployment system are primarily motivated by decreasing waste, fraud, abuse, and inefficiencies, not solving our national debt crisis.

Prior to reading my proposed changes, I request you review my previous unemployment assistance posts:
Part I: Overview
Part II: Roles and Goals - Please especially read this post as it details what I see as the functions of a federally funded unemployment system
Part III: Current System
Part IV: Pros and Cons

Tldr:

• Costs of unemployment system have ballooned in recent years. Between 2000 and 2010, a 1017% increase in dollars spent and a 698% in percent of GDP was realized.
• Current system is very complex. I had to go to law manuals to get information...

Proposed Changes -

To preface, these changes are only for a national unemployment system and do not reflect my beliefs on how other groups (friends/family, private charities, local governments) should administer unemployment assistance. Today I will cover general rationale and aim for changes. My next post will go into the nuts and bolts, and dollars and cents of how to implement stated changes.

1) Increased participation of individual, friends/family, private charities, and state/local governments

I believe nationalized unemployment assistance should be the quinary (5th) safety net behind those listed above. I do not believe one size fits all. I would strongly encourage private charities and state/local governments to extend and increase benefits as they see fitting. In addition to tailoring assistance to the specific community in need, I believe empowering other groups would propel creative designs for unemployment assistance.

States already have the authority to offer additional unemployment assistance. The federal government simply needs to step out of the way. I find it interesting no states offer longer benefits than mandated or subsidized by the federal government.

2) Benefit repayment

As covered in Food Assistance Part I and Part 2, I believe implementing a repayment plan largely retains the benefits of public unemployment assistance in providing sufficient and timely aid, while minimizing the risk of waste, fraud, abuse, and inefficiency.

3) Reduce maximum duration

Consistent with functioning as quinary safety net, recipients would be eligible to receive benefits for 12 weeks. Again, private charities and local governments would be encouraged to extend benefits longer as they deem appropriate.

4) Increase eligibility

All individuals with documented loss of taxable income are eligible for benefits. While less common today, part-time workers may be disqualified from collecting unemployment benefits. Please see State of Minnesota's Guidelines for working while collecting unemployment benefits.

5) Maximum lifetime limit

Individuals would be eligible for 12 paid weeks of unemployment. Individuals would accumulate additional eligibility (up to 12 weeks) as they repaid the benefits they previously received. Mathematically this gets complicated and these specifics will be covered in my next blog post. 

6) Increase flexibility

Recipients would be able to choose (up to maximum limit) amount and duration of benefits. Rather than our current system where there is little incentive to take reduced benefits, with the addition of a repayment plan, individuals would have an incentive to only take those benefits they need.

Change recap

• Increase individual, friend/family, private charity, and local government involvement
• Implement repayment plan
• Decrease duration of benefits
• Increase eligible participants
• Enact maximum lifetime limit
• Increase payment flexibility

Tldr: I support a federally funded unemployment system, however, I believe it should be the quinary (5th) safety net behind:

1. Individual
2. Friends/family
3. Private charities
4. Local governments 
5. National government

Advantages and disadvantages of proposed changes

Advantages -

• Greater flexibility and creativity by moving away from the one size fits all structure
• More citizens would be eligible for benefits (part time workers)
• Decreased risk of waste, fraud, and abuse
• Disincentives in place to reduce unnecessary utilization
• Less dependence on national government
• I see this as an advantage although some would argue it is a disadvantage

Disadvantages -

• May increase confusion with a number of states, cities, and private charities each creating and administering their own system
• Things may get worse before they get better
• Infrastructure may not be in place for private charities and local governments to pick up slack at this time

I do not believe there is a panacea for our nation’s unemployment system. Each individual case is simply too complex and varied to have a cookie cutter system. I do believe the closest we can get is giving individuals and communities the greatest freedom to design and implement a system they see most fitting. Hence my rational for proposing changes removing the federal government as the primary provider of unemployment assistance and empowering others. 

Admittedly, unemployment assistance is a very complex and difficult subject. In my next post I hope to further eliminate confusion with my proposed changes by getting into specific dollars and cents what my proposed national unemployment assistance system would look like. Meanwhile, keep your stick on the ice.

Next Post Topic: Unemployment Assistance Part VI: Change Specifics

Gardening Part III: 2013 Recap

September 15th. A day in history that brings together:

USA Today, Lehman Brothers, Christopher Columbus (Mayflower departs England), and Dan Marino (birthday)

AND…..  

Bemidji, MN 2013 First Frost Date!

While the first frost date for Bemidji, MN pales in comparison to other noteworthy events on September 15th, it does mark the conclusion of my garden’s harvesting season. 

Even during a shortened year (109 days between last and first frost dates, 123 days is average for Bemidji, MN), 2013 was my first profitable year. So much so I was able to cover my expenses since my garden’s inception in 2011! With the recent addition of rain barrels, I hope to further expand my garden in 2014, improve my yield of green peppers and okra, and increase variety with the addition of rhubarb and asparagus.

Consistent with SMART goals and QAPI , I enjoy collecting and analyzing data. I find progress is very difficult without being able to measure outcomes and identify areas for improvement. Below is a summary of all data collected from my initial garden in 2011 to the end of 2013.




Raw Data Spreadsheet

2013 Goal Review 
Profitable

• Total Profit: $110.54
• Revenue: $151.50 Expenses: $40.96
• Return on Investment (RoI): 3.7
• Does not include water and time costs

Garden size > 200 ft²
Learn how to grow plants from seeds

• Tomatoes and green peppers were successfully transplanted
• Plan to try okra and cucumbers next year

Build and test rain barrel watering system

• Building and installation complete, testing still underway
• 3 x 50 gallon capacity (150 gallons total), plan to add 2 additional barrels next year
• Please email me if interested in detailed instructions in building your own system!

2013 was a historic year for gardening success, expansion, and innovation (rain barrels). Next year I plan to expand my garden to 300 ft2, add rhubarb and asparagus, perfect my rain barrel system, and reach a RoI of greater than 5.0. While September 15th, 2013 pales in comparison to other historic events, I will remember it as my first profitable gardening year :).

Next Post Topic: Book Review IV: When Helping Hurts