Kokua Line: State explains ‘Option 1’ for long-term unemployed in Hawaii

Question: With this pandemic dragging on, it’s been nearly a year since a lot of us first filed for unemployment last March or April. We are wondering what is going to happen when our benefit year expires? Will we even be able to qualify for a new claim, since we haven’t been able to work much or at all? This is a scary time as we wait for the PEUC extension and wonder what is going to happen in a few months when we hit that one-year mark.

Answer: No single answer fits all scenarios, but you raise an issue that is worrying a lot of unemployed or partially employed people in Hawaii, and throughout the country. As Michelle Evermore recently explained on the National Employment Law Project blog, “as people reach one year of collecting unemployment, state agencies are usually required to recalculate benefits based on prior-year earnings. During lengthy recessions, that could mean someone who only had sporadic work or was unemployed for the whole year may qualify for a much smaller benefit, if any benefit at all.”

She noted that the Continued Assistance Act, enacted Dec. 27, 2020, as a follow-up to the U.S. CARES Act, gives states options to help mitigate this problem. The U.S. Department of Labor explained the options in a recent advisory to states, which you can read at 808ne.ws/uipl1720.

We followed up with the state Department of Labor and Industrial Relations to see what Hawaii is going to do. In the scenario you describe, the state would apply Option 1, which would establish a new benefit year for the claimant, but defer payment of the new regular claim until previous PEUC eligibility was exhausted.

(PEUC is Pandemic Emergency Unemployment Compensation, the federal payment for people who have exhausted their 26 weeks of regular state Unemployment Insurance.)

DLIR spokesman Bill Kunstman spelled out the details in an email:

“Under Section 383-29(a)(5)(C), HRS, the individual must have worked during the prior benefit year to be eligible for benefits in the succeeding benefit year. In essence, the individual must have worked in covered employment during the period following the beginning of the expired benefit year and been paid wages in an amount equal to at least five times the weekly benefit amount (WBA) for the new potential benefit year. This is in addition to meeting the normal base period wage qualifications (wages in at least two quarters of the base period, and been paid wages equal to at least 26 times the new WBA).

“Initially, the CARES Act required the individual to exhaust their entitlement to regular UI before being eligible for PEUC. Once an individual qualified for a new regular UI claim, the individual would no longer qualify for benefits under the PEUC program and the individual would be required to draw benefits under the new regular UI claim.

“Under the CAA, for individuals whose benefit year expires after Dec. 27, 2020, and have a remaining balance on PEUC, these individuals can elect to remain on PEUC, provided the weekly benefit amount on the new regular benefit year is lower than the PEUC weekly benefit by $25 or more. For Hawaii, this applies to claims with a benefit year expiration date of Jan. 2, 2021, or later. This population will be afforded Option No. 1, which will have the claimant establish the new claim with the applicable effective date but postpone payments on that claim and allow the individual to draw out the balance of the PEUC claim or until the PEUC program expires, whichever comes first, then resume on the new claim.”

Peter Yee, a moderator for the 25,000-member Hawaii Unemployment & Support Group on Facebook, said this should reassure claimants who have enough earnings to establish a new regular UI claim when their initial claim expires. That would include many readers contacting Kokua Line, who are furloughed (partially unemployed).

However, Yee, who has helped countless Hawaii residents navigate the arcane unemployment system, said there will be plenty of others who won’t be able to qualify for a new claim, due to a lack of earnings. He said they may find hope in earlier USDOL guidance (808ne.ws/uipl1720-1) that said “exhaustees” may also continue to receive PEUC in certain situations. We’ll follow up with the DLIR about those prospects.

Write to Kokua Line at Honolulu Star-Advertiser, 7 Waterfront Plaza, Suite 210, 500 Ala Moana Blvd., Honolulu 96813; call 529-4773; fax 529-4750; or email kokualine@staradvertiser.com.