Emergency Unemployment Compensation (EUC)

Definition

The term Emergency Unemployment Compensation refers to a federal program that provides income to individuals that have exhausted benefits available through their state.  The Emergency Unemployment Compensation (EUC) program was created in 2008.

Explanation

Most state level unemployment compensation programs provide income to qualifying individuals for up to 26 weeks.  When unemployment is relatively high, federal programs may be available to extend the duration of these benefits.  The Emergency Unemployment Compensation (EUC) program provides this service.

The EUC has been modified several times since it was created back in 2008.  As of this writing (May 2015), the EUC program expired on January 1, 2014, and Congress has not passed any further extensions.  The benefits under EUC were broken down into four tiers:

  • Tier 1:  applied to all states and included up to 14 weeks of additional compensation benefits.
  • Tier 2:  applied to states with at least 6% unemployment and included 14 weeks of additional compensation benefits.
  • Tier 3:  applied to states with at least 7% unemployment and included 9 weeks of additional compensation benefits.
  • Tier 4:  applied to states with at least 9% unemployment and included 10 weeks of additional compensation benefits.

An unemployed worker would start at Tier 1 and once they exhausted those benefits, they could move up to the next Tier; if the unemployment rate in their state qualified them for that benefit.

Example

Bill resides in a state where the unemployment rate is greater than 9%.  This qualifies Bill for benefits up to Tier 4, which includes:

  • 26 weeks of unemployment compensation through his state program
  • 14 additional weeks of benefits through EUC's Tier 1
  • 14 additional weeks of benefits through EUC's Tier 2
  • 9 additional weeks of benefits through EUC's Tier 3
  • 10 additional weeks of benefits through EUC's Tier 4

In this example, Bill can collect unemployment benefits for a total of 26 (state program) + 14 (EUC Tier 1) + 14 (EUC Tier 2) + 9 (EUC Tier 3) + 10 (EUC Tier 4), or 73 weeks.

Related Terms

unemployment benefitpartial unemployment benefit, Extended Benefits