Unemployment Insurance

The states have the direct responsibility for establishing and operating its own unemployment insurance programs, while the federal government finances the cost of administration. State unemployment insurance tax collections are used solely for the payment of benefits. Federal unemployment insurance tax collections are used to finance expenses deemed necessary for proper and efficient administration of the state unemployment insurance laws; to reimburse state funds for one-half the costs of extended benefits paid under the provisions of state laws which conform to the provisions of the Social Security Act and the Federal Unemployment Tax Act; and to make repayable advances to states when needed to pay benefit costs. Funds used for benefit payments may not be used for any program administration costs nor for training, job search, and job relocation payments. Disaster Unemployment Assistance (DUA) is paid out of funds provided by the Federal Emergency Management Agency (FEMA); and Pandemic Unemployment Assistance (PUA), Federal Pandemic Unemployment Compensation (FPUC), Pandemic Emergency Unemployment Compensation (PEUC) , and Mixed Earners Unemployment Compensation (MEUC) are paid from funds provided by the Federal government. Benefits for former Federal civilian employees, including postal workers, and former members of the Armed Forces are paid out of the Federal Employees Compensation Account (FECA) in the Unemployment Trust Fund, subject to reimbursement by the former employing agency. Trade Adjustment Assistance payments are made by states for workers adversely affected by trade imports or shifts in production.