Identify and Transfer Unemployed Public Assistance Recipients to Unemployment Insurance Benefits

The Department of Human Services and the Texas Employment Commission should identify and transfer unemployed public assistance recipients to Unemployment Insurance (UI) benefits when possible.


Background
The federal Emergency Unemployment Compensation Act (EUC) of 1991 gave emergency benefits to workers whose regular unemployment insurance (UI) expired between March 1991 and November 1991. The EUC benefits are funded by the federal government, and the UI b enefits are funded by Texas employers through the Unemployment Compensation Tax.

The original EUC act made approximately 350,000 Texans eligible for up to 13 weeks of additional benefits. The act was amended to extend the benefits to 20 weeks and the qualification deadline to July 4, 1992. The act was amended again on July 3, 1992, and extended the time f or which unemployed individuals may file for emergency unemployment insurance benefits to March 6, 1993. Additionally, this amendment provided more liberal guidelines to allow more unemployed Texans to qualify for emergency benefits.

The Department of Hu man Services (DHS) is the state agency that administers benefits to individuals who qualify for the Aid to Families with Dependent Children (AFDC) program. The amount of AFDC benefits paid is based on wages and other income. An individual who is receiving unemployment benefits generally has too much income to qualify for AFDC benefits. According to DHS policy, eligibility workers refer individuals to Texas Employment Commission (TEC) for UI benefits if an interview reveals that the person was laid off of wo rk. Additionally, TEC and DHS work together to ensure that an individual is not receiving both UI and AFDC benefits and that reported wages are accurate.

TEC notified all individuals who appeared eligible for the emergency UI benefits; however, TEC did not notify DHS of the emergency benefits or of the extension deadlines for which an individual may file for benefits. 1 Therefore, the 10,000 DHS eligibility workers who take applications for AFDC were not officially notified of the emergency benefits or of the filing extension.

In December 1992, the Texas Performance Review requested a crossmatch of DHS s AFDC file and TEC s UI claimant file. The purpose of the crossmatch was to determine how many AFDC recipients are eligible for emergency benefits. Crossmatching revealed 570 AFDC recipients who may be eligible for the EUC emergency benefits. 2

The individuals receiving AFDC would benefit more by receiving the EUC benefits. The AFDC benefits average approximately $184 a month for a family of three, and the UI benefits range from $160 to $1,000 per month with an average of $693 per month.

The EUC benefits and TEC s labor exchange program that helps people find jobs are funded by federal dollars. AFDC benefits and the Job Opportunities and Basic Skills (JOBS) program, administered by DHS to help recipients find jobs, are partially funded by state general revenue.

For fiscal year 1993, the estimated savings from the recommended transfer of recipients is $640,000 based on the assumption that 50 percent of the 570 recipients would receive EUC benefits instead of AFDC benefits. DHS would need to review the 570 individuals in the match to determine if they should apply for emergency benefits before the March 6, 1993, deadline.

The federal government established an optional trigger for permanent extended benefits based on a minimum total unemployment rate of 6.5 percent. This would give Texas more discretion in providing extended benefits based on the assessment of the Texas economy. Benefits paid from this opt ional trigger would be funded 50 percent by the federal government and 50 percent by the state through the Unemployment Compensation Tax. The Texas Legislature will need to pass legislation to allow this option.


Recommendations
A. Texas Employment Commission (TEC) should inform Department of Human Services (DHS) of all Emergency Unemployment Compensation regulations and of the extension deadlines for which an individual may file for benefits.

B. TEC and DHS should perform a crossmatch of clients on a monthly basis to determine those that might be eligible for extended benefits.

Although it is unclear whether or not the federal government will provide extended unemployment benefits after March 6, 1993, DHS and TEC should develop procedures that will trigger monthly cross-matching should the federal government extend benefits.

C. DHS should take an active role and encourage recipients to apply for unemployment insurance benefits.

DHS should post information on unemployment insurance and emergency benefits from TEC in local DHS offices.


Implications
AFDC recipients would benefit because there is a possibility they would receive more benefits. Recipients would receive in a timely manner the benefits of the TEC labor exchange program, which brings together individuals seeking employment and employers se eking workers. Through this program, job seekers are provided with job search information and techniques to help them present their qualifications to employers.


Fiscal Impact
The $640,000 savings genera ted for 1993 cannot be projected to future years because it depends upon whether the federal government extends the Emergency Unemployment Compensation Act and/or if the Texas Legislature will accept the optional trigger for permanent extended benefits.



Endnotes
1 Interview with Jean Mitchell, Program Director, Texas Employment Commission, October 2, 1992.
2 Letter from Phoebe Knauer, Director, Information Release, Texas Employment Commission, December 3, 1992.