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Tier 5: Extension Update - August 23rd, 2010

As unemployment benefits expire, many people are aksing about a “Tier 5″ extension.

Background

If implemented, a Tier 5 would add additional weeks of unemployment benefits. To date, the previous extensions passed by Congress this year have only extended eligibility for existing tiers, enabling you to receive up to a maximum of 99 weeks in most states. The 2010 extensions have not added any additional weeks to the total available.

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Many people have already exhausted their 99 weeks (or their state maximium), but are in need of further assistance.

Tier 5 Extension – New Proposal Introduced

Michigan Senator Debbie Stabenow introduced new legislation during the first week of August that formally brings the Tier 5 discussion in front of Congress. Here are the highlights of the propsal:

  • The bill would add an additional 20 weeks of benefits for people who have had their benefits expire.
  • The proposal would require that the unemployment rate in your state must at least 7.5% in order to qualify.
  • Also included in the proposal are tax breaks for business owners who hire
  • The new legislation has not yet been voted upon.

What’s Next?

  • Members of Congress are on recess through September 12th.
  • The Senate will next address the proposal upon their return in September.

Is A Tier 5 Necessary?

Tier 5

Have you exhausted 99 weeks of benefits?

Are you recently unemployed, and only eligibile for 26 weeks of benefits?

Would a “Tier 5″ of Emergency Unemployment Compensation helpful you?

Thousands of Americans have received the maximium number of unemployment benefits in their state, and are asking “What Next?”

Let’s look at both sides of the Tier 5 debate:

People against a Tier 5 argue the following:

  • The country can’t afford it. An additional unemployment extension would increase the Federal deficit and the national debt.
  • 99 weeks is enough. With regular benefits lasting only 26 weeks, tier 5 opponents argue that at 99 weeks, unemployment recipients are already getting nearly 4 times the regular amount.
  • More benefits sends the wrong message. Those against a tier 5 (and unemployment extensions in general) think that extending benefits encourages people to not work.

Here’s what Tier 5 supporters have to say:

  • Government can afford it. With billions of dollars of government money to bail out the banks and fund foreign wars, the government has the ability to financially support a tier 5 extension.
  • The economy requires it. Many “99ers” argue that they are actively looking for work, but in an environment where there are 6 applicants for every 1 job opening, the math just doesn’t work.
  • Government should watch out for its people. This was the reason that unemployment benefits were created in the first place — to create a social “safety net”.

What is your view on a Tier 5 extension? Feel free to leave a comment below.