UIPL_1-19_Acc.pdf

ETA Advisory File Text

EMPLOYMENT AND TRAINING ADMINISTRATION ADVISORY SYSTEM U.S. DEPARTMENT OF LABOR Washington D.C. 20210 CLASSIFICATION UI CORRESPONDENCE SYMBOL OUI DFAS DATE December 12 2018 RESCISSIONS None EXPIRATION DATE Continuing ADVISORY TO UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 0 1-19 STATE WORKFORCE AGENCIES FROM SUBJECT MOLLY E. CONWAY s Acting Assistant Secretary Implementation of Sequestration under the Budget Control Act of 2011 for Mandatory Unemployment Insurance Programs for Fiscal Year 2019 1.Purpose. To provide sequestration rules for Fiscal Year FY 2019 to State Workforce Agencies SWAs that apply to mandatory Unemployment Insurance UI programs and information on how the U.S. Department of Labor Department will apply those rules. These rules include the application of sequestration on delayed benefit payments for prior FYs and the resulting administrative costs. 2.Action Requested. State Administrators are to provide this guidance to appropriate staff. 3.Summary and Background. The Budget Control Act of 2011 BCA amended the Balanced Budget and Emergency Deficit Control Act of 1985 BBEDCA to require reductions in budgetary authority known as sequestration beginning on January 2 2013 unless Congress passed and the President signed a bill that reduced the deficit by at least 1.2 trillion over 10 years. As required by the sequestration order and set out in the February 12 2018 Office of Management and Budget OMB Report to Congress on the Joint Committee Reductions for FY 2019 a 6.2 percent reduction in non-exempt mandatory programs became effective on October 1 2018 for FY 2019. For any active impacted Extended Benefits EB or Emergency Unemployment Compensation EUC claims explained further below to which the 6.2 percent sequestration was not applied for weeks of unemployment during FY 2019 an adjustment to future payments must be made. If the FY 2018 sequestration of 6.6 percent was applied to weeks of unemployment during FY 2019 claimants must be reimbursed the difference. If no sequestration percentage was applied to such weeks the adjustment must be applied to future payments in the current benefit period so that the total amount of benefits paid equals the amount that would have been paid if the 6.2 percent sequestration had been applied since the beginning of FY 2019. For any benefit payments made to claimants who are no longer claiming or if remaining entitlement is insufficient to recoup the 6.2 percent sequestration amount or any portion of that sequestration amount an overpayment for the amount must be established. 2 4. Impact of Sequestration in FY 2019 on Benefit Payments Delayed from Prior Fiscal Years and Resulting Administrative Costs . Programs listed in this section that issue benefits in FY 2019 for prior periods are sub ject to the 6.2 percent FY sequestration reduction. The reduction applies to the payments issued and the associated administrative costs. This is because FY 2019 funds rather than prior year funds have been apportioned for these p urposes. 1 EUC ben efits and administration and 2 The Federal share of EB benefits . Treatment of a dministrative funds for EUC is discussed below. Impact of Sequestration on the Mandatory UI Programs in FY 2019 . Below is a list of programs projects and activities PPAs related to the mandatory UI programs and the applicability of sequestration to each PPA. The following PPAs are exempted from sequestration 1 Unemployment compensation paid by a state from its account in the Unemployment Trust Fund 2 Title XII Social Security Act SSA advances to states and 3 Unemployment Compensation for Federal Employees UCFE and Unemployment Compensation for Ex -Servicemembers UCX . Note The Federal Emergency Management Agency advises that there is no impact on Disaster Unemp loyment Assistance DUA administrative funding or benefits. Sequestration applies to the following PPAs 1 The Federal share of EB benefits 2 Trade Adjustment Assistance TAA funds appropriated under the Federal Unemployment Benefits and Allowan ces Account FUBA and 3 EUC benefits and administrative costs . Impact of Sequestration on EB . The applicable percentage reduction to the Federal share of EB benefit costs is 6.2 percent starting with weeks of unemployment ending on October 6 2018 and ending with weeks of unemployment ending on October 5 2019. Unless a state amend s its law to reduce EB benefits as explained below a reduction in the Federal shar e of EB due to sequestration means the state becomes responsible for paying the remain ing EB share from its own funds i.e. the amount represented by the 6.2 percent reduction. Authority for States to Reduce EB Weekly Benefit Amounts due to Sequestration Under the Federal -State Extended Unemployment Compensation Act EUCA the EB weekl y benefit amount WBA is the amount of regular compensation including 3 dependents allowances under the State law payable to such individual for such week for total unemployment . Section 202 b 2 Federal -State EUCA. However 2 U.S.C. 906 i 2 BB EDCA S ection 256 i 2 permits states to reduce EB WBA s if the Federal shar e of EB benefit costs is reduced under a sequestration order. That section provides A A State may reduce each weekly benefit payment made under the Federal -State Extended Une mployment Compensation Act of 1970 for any week of unemployment occurring during any period with respect to which payments are reduced under an order issued under section 904 of this title by a percentage not to exceed the percentage by which the Federal p ayment to the State under section 204 of such Act is to be reduced for such week as a result of such order. B A reduction by a State in accordance with subparagraph A shall not be considered as a failure to fulfill the requirements of section 3304 a 11 of Title 26. As a condition of reducing EB WBAs s tate law must authorize the reduction in EB WBA s as specified in the BBEDCA. Note that actual reductions in Federal spending could not be achieved if WBA s are reduced without also reducing individual s remaining entitlement or maximum benefit amount MBA for EB. For this reason state law must also provide for reductions in EB remaining entitlement and MBA if it provides for reduc ing EB WBAs . Any state amending its law to provide for EB reductions due to sequestration must provide notice to claimants and an opportunity to appeal the calculation of the amounts. The notice should also inform claimants that appeal of the sequestration reduction itself will not succeed as sequestration is mandated by Fe deral law. Impact of Sequestration on EUC . EUC funding for both benefits and administration is subject to a sequestration reduction of 6.2 percent in FY 2019. Although any residual EUC benefit payments made in FY 2019 would relate to benefit weeks that occurred in prior fiscal years the FY 2019 sequestration reduction of 6.2 percent will be applied to any EUC benefit payments made in FY 2019. This is because FY 2019 funds rather than prior year funds will be apportioned for these purposes. EUC admin istration is funded quarterly in combination with above -base workload for regular UI. The sequestration reduction of 6. 2 percent will be applied to above -base funds provided to the state for the administration of EUC for the quarter ending December 31 20 18 . Although the EUC program expired on January 1 2014 the Department will continue to provide administrative funds to cover residual EUC administrative workloads. Impact of Sequestration on TAA . The applicable percentage of reduction to TAA is 6.2 pe rcent in FY 2019. As in previous fiscal years using the flexibility under BBEDCA the Department will apply the full TAA Program sequestration to the funding for Training and Other Activities which are the funds available for training employment and ca se management services out -of-area job search relocation allowances and related administrative expenses. The reductions will not be applied to Trade Readjustment 4 Allowances TRA Reemployment Trade Adjustment Assistance RTAA benefits or Alternative Trade Adjustment Assistance ATAA available under the TAA Program. 5. Inquir ies. Please direct inquiries to the appropriate Regional Office. 6. References . Federal -State Extended Unemployment Compensation Act of 1970 Federal -State EUCA Pub. L. 91 -373 Balanced Budget and Emergency Deficit Control Act of 1985 BBEDCA Pub. L. 99 - 177 as amended by the Budget Control Act Budget Control Act of 2011 BCA Pub. L. 112 -25 Middle Class Tax Relief and Job Creation Act of 2012 Pub. L. 112 -96 America n Taxpayer Relief Act of 2012 ATRA Pub. L. 112 -240 Unemployment Insurance Program Letter UIPL No. 23 -08 dated July 7 2008 Supplemental Appropriation Act 2008 Title IV Emergency Unemployment Compensation UIPL No. 04 -10 Change 3 dated July 23 2010 Emergency Unemployment Compensation Program Extension and Modification Extended Benefits Temporary Provisions Extension and Expiration of Federal Additional Compensation and Change 9 dated March 5 2012 Extension and Modification of Emergen cy Unemployment Compensation 2008 EUC08 and Extension of Temporary Extended Benefits EB Provisions UIPL No. 22 -12 dated June 18 2012 Short -Time Compensation Provisions in the Middle Class Tax Relief and Job Creation Act of 2012 UIPL No. 13 -13 d ated March 8 2013 Implementation of Sequestration under the Budget Control Act of 2011 for the Unemployment Insurance Programs for Fiscal Year 2013 and Change 1 dated April 9 2013 Implementation of Sequestration under the Budget Control Act of 2011 f or the Unemployment Insurance Programs for Fiscal Year 2013 Questions and Answers Emergency Unemployment Compensation UIPL No. 15 -13 dated March 29 2013 Unemployment Insurance UI Supplemental Funding Opportunity to Fund Costs Attributable to the Implementation of the Sequestration Impacts on the Emergency Unemployment Compensation EUC Program UIPL No. 27 -13 dated September 9 2013 Unemployment Insurance UI Supplemental Funding Opportunity to Fund Costs Attributable to the Implementation of the Sequestration Impacts on the Emergency Unemployment Compensation EUC Program in Fiscal Year FY 2014 UIPL No. 30 -13 dated September 27 2013 Implementation of Sequestration under the Bu dget Control Act of 2011 for Mandatory Unemployment Insuranc e Programs for Fiscal Year 201 4 UIPL No. 2 -15 dated October 15 2014 Implementation of Sequestration under the Budget Control Act of 2011 for Mandatory Unemployment Insurance Programs for Fiscal Year 2015 and Change 1 dated January 22 2015 5 UIPL No. 12 -16 dated March 29 2016 Implementation of Sequestration under the Budget Control Act of 2011 for Mandatory Unemployment Insurance Programs for Fiscal Year 2016 UIPL No. 9 -17 dated January 19 2017 Implementation of Sequestration under the Budget Co ntrol Act of 2011 for Mandatory Unemployment Insurance Programs for Fiscal Year 2017 UIPL No. 6 -18 dated March 30 2018 Implementation of Sequestration under the Budget Control Act of 2011 for Mandatory Unemployment Insurance Programs for Fiscal Year 20 18 and Office of Management and Budget OMB Report to the Congress on the Joint Committee Reductions for Fiscal Year 2019 dated February 12 2018. 7. Attachment s . Not Applicable