Minnesota's unemployment benefits are set to drop to 40 weeks, sooner than thought.
Judy Schneider opened her mail Tuesday and cried. A letter from the state said her federal unemployment would abruptly end this summer and not next winter as she expected.
"I am just devastated. I was not expecting this," said the computer-whiz office-assistant, who lost her $45,000-a-year job to budget cuts last August.
Schneider is one of 10,000 Minnesotans who received the state's letter over the past several days. All "Tier 1" unemployment benefits that expire after June 24 will not be extended to "Tier 2" as originally planned. The reason? Minnesota's three-month average unemployment rate has fallen below 6 percent, the level that triggered the extended benefits.
Newly unemployed Minnesotans who at one time were eligible for up to 79 weeks of benefits now are guaranteed only 40 weeks. The first 26 weeks will be paid by the state, just as they always were. The next 14 weeks -- called Tier 1 -- are paid by the federal government. But the federal second- and third-tier programs are being phased out in Minnesota.
"Most people would have expected that they would move onto the next tier but now they won't," said Kim Isenberg, spokeswoman for the Minnesota Department of Employment and Economic Development. The unemployment office is braced for a high volume of calls from worried recipients, but so far, it's been relatively calm, Isenberg said.
The cutback of benefits smacks against Friday's news that the national jobless rate ticked up to 8.2 percent after employers added only 69,000 jobs in May.
Desperate job seekers like Schneider say they are just trying to process all the bad news. She has been searching for work for months without luck. Without unemployment checks, she fears she will lose her home. The state mailed its notices over the Memorial Day weekend, giving Schneider and 10,000 others not much time to figure out their next move.
According to the Department of Employment and Economic Development, roughly 90,000 Minnesotans are receiving unemployment. The state has 166,000 unemployed Minnesotans who are actively looking for work.
The latest change marks the third unemployment program to end in Minnesota in the last six months and signals the thinning of Minnesota's safety net, job counselors said.
In December, 7,000 Minnesotans learned that they would lose a final 13 weeks of extended benefits that were only available in Minnesota and a few other states. In April, the federal government ended its third-tier emergency unemployment. That change also affected an estimated 7,000 Minnesotans.
Then in May, unemployed Minnesotans got word that the government's second-tier emergency program would phase out beginning June 24.
The end of the longer unemployment programs was triggered by federal statues that halt the second- and third-tier programs when a state's three-month average unemployment rate drops below 6 percent. The three-month average through April is now 5.7 percent.
The end of the 13-week extended benefit program in January was triggered after Minnesota's average jobless rate slid below 6.5 percent.
After peaking at 8.5 percent in June 2009, Minnesota's jobless rate fell to 6.1 percent in October and 5.9 in November. Since then the declines have continued; the unemployment rate for April was 5.6 percent.
As a result, Minnesotans who exhaust their 14 weeks of "Tier 1" unemployment after June 24 will no longer be eligible to receive "Tier 2," which had provided another 13 weeks of unemployment pay. Only those people whose Tier 1 benefits end before June 24 will be allowed to proceed into Tier 2, Isenberg said.
The hope is that not all those losing benefits will be affected, Isenberg said. "Some will find jobs before their actual expiration date," she said.
Louis Huether, program manager for the Resource dislocated worker program in Minneapolis, said at least a dozen clients who received the state's letter called Resource job counselors in a panic. Some are losing homes. Others need help with rent and utilities. Some have cycled through two and three layoffs.
"This is extremely tough on these individuals," said Huether.
The state has put information on its www.uimn.org website about benefit changes. Officials also are urging job seekers to tap Minnesota's 46 workforce centers and its online jobs board, MinnesotaWorks.net.
Still, employment agency officials in the Twin Cities said that some laid-off job seekers didn't anticipate the abrupt end of their unemployment and are now scrambling.
Jeanine Janos, regional manager of the Jeane Thorne staffing agency, said an applicant she worked with eight months ago called on Thursday in a panic.
"I have not heard from her a lot. But then she just resurfaced," Janos said. "She said, 'I just found out that my benefits are ending and I really need to step up my job search or I am going to lose my house.' "
Dee DePass • 612-673-7725
Minnesotans received a letter last week informing them that their unemployment benefits will end earlier than they had expected