US Department of Labor calls on states to apply for unemployment insurance modernization funding

WASHINGTON – The U.S. Department of Labor today called on states to apply for more than $4 billion in unemployment insurance modernization funding made available through the American Recovery and Reinvestment Act of 2009 (Recovery Act) for those states that expand access to unemployment benefits. These funds can be used by states to pay unemployment insurance benefits and may be used for other defined purposes if appropriated by state legislatures.

"Many states already have made the choice and updated their laws to reflect the changing needs of the nation's unemployed," said Secretary of Labor Hilda L. Solis. "Those states that have not yet applied for funding should take this opportunity to assist the millions of individuals who are out of work through no fault of their own and who are in great need of assistance."

The Assistance for Unemployed Workers and Struggling Families Act – enacted as part of the Recovery Act on Feb. 17, 2009 – provides for a special distribution of $7 billion in unemployment compensation modernization incentive payments to states. A state must make an application to the Department of Labor demonstrating that state laws contain certain benefit eligibility provisions.

Currently, in some states, fewer than three out of 10 jobless workers qualify for unemployment benefits due, in part, to eligibility restrictions in state laws. Unemployment modernization provisions allow an expanded group of workers – including recent entrants to the labor force, low-wage workers, part-time workers and individuals unemployed as a result of family circumstances – to be eligible for unemployment benefits.

Unemployment modernization funds can be used to pay unemployment compensation benefits, and in some instances, may lessen the need of states to borrow money from the federal government. Unemployment modernization payments are not loans and do not need to be paid back. As of today, a total of $2,845,024,070 in incentive payments has been disbursed to 32 states. The amount remaining is $4,154,975,930.

Visit http://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=2851 to read the guidance issued to states and visit http://www.dol.gov/recovery/map/map-ui-modernization.htm to view a chart detailing which states have received unemployment modernization funding. For more information on the Department of Labor's employment and training programs, visit http://www.doleta.gov.