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Changes in unemployment benefits saved Pa. $214 million last year.

By Ann Belser, Pittsburgh Post-Gazette
McClatchy-Tribune Information Services

June 18--In 2012, after four years of sustained high unemployment, the trust fund that pays unemployment compensation in Pennsylvania was $4 billion in the red and the state had to pay back the federal government.

Along with borrowing $3 billion at a 1.29 percent interest rate, which saved Pennsylvania$150 million in interest payments, the state also changed the eligibility rules. That move saved the unemployment trust fund $214 million in 2013.

The biggest shift had to do with how much of a worker's annual salary was earned in one quarter. Under the old rules, seasonal workers could earn up to 63 percent of their annual income in a single quarter and still qualify for at least six months of unemployment when their jobs ended.

The change put into effect by the Legislature -- and championed by Julia K. Hearthway, secretary of the Pennsylvania Department of Labor and Industry -- called for workers to make no more than 50.5 percent of their earnings in their highest quarter of working.

For example, to collect unemployment, a lifeguard cannot just work during the summer and not work the rest of the year.

The change in the rules alone saved the unemployment compensation trust fund $136 million in 2013.

The move was fought by the construction industry, a traditionally seasonal industry. Labor leaders argued that their workers would take the brunt of the rule change. But an analysis by the state Department of Labor and Industry has found that construction did not take the hardest hit.

Instead, professional and business services -- a category that includes temporary employees -- accounted for 19 percent of the people who were disqualified from collecting unemployment because of the change.

The construction industry, which accounts for 14 percent of the unemployment compensation claimants, also accounted for 14 percent of the people disqualified.

Ms. Hearthway said, before the changes were enacted, the state estimated 49,000 people would be disqualified because of the change. Over the year, 41,000 were affected.

Workers in education and health services accounted for 15 percent of those disqualified by the change.

The two industries with the fewest people who were disqualified were public administration and natural resources and mining, which each accounted for just 2 percent of the people disqualified.

Along with some seasonal workers, low-income earners also lost their unemployment due to state rule changes.

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Workers who were qualified for minimum payments of $35 up to $69 a week in unemployment insurance payments were cut from receiving unemployment, which saved the state $2.7 million last year.

Ann Belser: abelser@post-gazette.com or 412-263-1699.

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(c)2014 the Pittsburgh Post-Gazette

Visit the Pittsburgh Post-Gazette at www.post-gazette.com

Distributed by MCT Information Services

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