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RI DLT Announces New Max Weekly Benefit Rates for Unemployment and TDI

8/6/2014

The Rhode Island Department of Labor and Training has announced that the maximum weekly benefit rate for Unemployment Insurance claimants for Fiscal Year 2015 remains unchanged from its FY 2014 rate--$566 per beneficiary, and $707 for beneficiaries with five or more dependents--for at most 26 weeks of the July 1, 2014-June 30, 2015, benefit year.

"The rate calculation changes included in the Chafee Administration's UI overhaul and repayment plan in 2011 have stabilized Rhode Island's UI Trust Fund for three straight years and positioned DLT to be able to pay off the balance of our state loan from the Federal Government this November - seven months ahead of schedule," said DLT Director Charles J. Fogarty.

Fogarty is referring to Governor Chafee's direction to DLT upon taking office in January 2011 to make the Unemployment Insurance Trust Fund (UITF) solvent, ease the UI tax burden on RI's more than 32,000 businesses and put the UITF on more stable footing in the long term.

The legislation also brings the state's UI benefit structure in line with Connecticut and Massachusetts and builds the required reserves in the UITF in order to lower the employer state tax schedule. The State Budget adopted by the General Assembly in 2011 phased in the changes to the UI system over three years.

EMPLOYERS PAY FOR UI, EMPLOYEES PAY FOR TDI

Also today DLT announced that the maximum weekly benefit rate for Temporary Disability Insurance (TDI) is $770, an increase of $18 from the FY 2014 rate of $752. With the maximum five dependents, the maximum weekly rate will be $1,039; an increase of $24 over the 2014 rate of $1,015.

Whereas Rhode Island's businesses pay for UI benefits, Rhode Island's workers themselves pay for TDI. This insurance program protects workers against wage loss due to a non-work related illness or injury.

Under state law, DLT must recalculate the maximum weekly benefit rates for both UI and TDI every July. The maximum TDI rate is set at 85% of the average weekly wage paid to eligible employees in the previous calendar year.

RI'S AVERAGE UI DURATION IS 16.2 WEEKS; US AVERAGE IS 16.7 WEEKS

Rhode Island's average UI duration - meaning the average length of time that an eligible beneficiary collects UI payments - was 16.2 weeks as of March 31, 2014. The US average was 16.7 weeks as of March 31.

Although the RI Unemployment Insurance Trust Fund had a reserve of $198 million at the start of 2007, it became insolvent in March of 2009 due to the abnormally high unemployment rate that ultimately peaked at 11.9%. Like 29 other states, Rhode Island had to borrow from the Federal Government in order to make UI payments. The outstanding loan balance peaked at $290 million in April of 2012.

Some changes to the state UI system that were legislated beginning July 1, 2011, include:

Reducing the wage replacement percentage from 60% to 50% over three years.
Cutting the maximum weekly benefit rate from 67% to 57.5% of the state average weekly wage for covered employment, or $566, whichever is the greater amount.

Calculating weekly benefit rates using the average of a claimant's two highest quarters of work rather than using the highest quarter only.
Allocating an unemployed worker's severance over time before paying out UI benefits.
Extending the number of weeks a claimant must have worked in order to receive the maximum of benefits - 26 weeks in the benefit year, which begins July 1 in the calendar year.

Also according to its calculations, DLT announced that the new minimum weekly UI benefit will fall by $1 to $41 per week. DLT set the minimum weekly TDI benefit at $74 per week.