Madden/Beach Bill To Help Extend Unemployment Benefits Clears Labor Committee

A view of the Senate Chambers from the 2010-2011 Senate Reorganization.

Bill Would Change Trigger For Extending Unemployment Benefits

TRENTON – Legislation sponsored by Senators Fred Madden (D-Gloucester, Camden) and Jim Beach (D-Camden) that would help extend unemployment benefits for jobless residents has passed out of the Senate Labor Committee.

“While we are doing everything we can to create jobs and economic growth in New Jersey, the stubborn fact remains that far too many people are currently unemployed and coming very close to having their final lifeline cut,” said Madden. “By changing the trigger for unemployment benefits, we are helping people pay their mortgage and keep putting food on the table while they look for a job.”

“Unemployment benefits are vital to those who have fallen on hard times, but crucial for those who have been out of work the longest. Additionally, it has been shown that unemployment benefits are the greatest form of stimulus, because the money goes right back into the economy,” said Beach.

The bill, S-2680, would broaden the trigger that allows New Jersey to provide extended unemployment benefits. The legislation implements an option provided by the federal “Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010”. Prior to the enactment of that legislation, the federal government prohibited any broadening of a state’s extended benefits criteria.

Under the current law, extended benefits become effective if the total unemployment rate in the state for the most recent three-month period for which data is available: equals or exceeds 110% of the average unemployment rate in the State during either or both of the corresponding three-month periods ending in the two preceding calendar years; and equals or exceeds 6.5 percent, in which case 13 weeks of extended benefits will be provided, or equals or exceeds 8 percent, in which case 20 weeks of extended benefits will be provided.

The bill would broaden the first trigger to account for the unemployment rate for the preceding three years as opposed to the preceding two. By broadening the 110 percent trigger, New Jersey would be able to continue providing extended benefits, because the unemployment rate in 2008 was between 4.2 and 6.0 percent. The continued payment extended benefits would not result an increased cost to the State’s Unemployment Insurance Fund, because the federal act provides for full federal funding of extended benefits through December 31, 2011.

The legislation now heads to the full Senate.

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