New Yorkers who lose their jobs stand to get more generous aid from Albany under a 72% jump in the top unemployment pay that took effect this month.
New York hoisted the payment cap to $869 per week from $504, the state's first increase in six years after a flood of claims overwhelmed the system during the pandemic. The new limit puts New York near the top in the U.S. for unemployment pay, behind a $1,105 maximum in Massachusetts and $1,152 cap in the State of Washington.
The increase was included in the state budget in May as part of a deal with employers and labor unions to end a huge, pandemic-fueled unemployment debt. New York used its reserves to pay off that $7 billion debt to the federal government, enabling it then to raise unemployment benefits for the first time since 2019.
"Increasing the maximum weekly unemployment insurance benefit will greatly help New Yorkers navigating job loss," state Labor Commissioner Roberta Reardon said in a statement. "This historic increase will help more people make ends meet when they need it most and put money directly into the hands of those out of work through no fault of their own."
Unemployment surged across the U.S. in 2020 when the coronavirus pandemic struck, hitting nearly 16% statewide in New York that June as businesses closed and workers were laid off. New York borrowed billions from Washington to pay those claims after exhausting the trust fund that normally covers those expenses.
The maximum benefit was frozen at $504 because of that debt. New York also began charging businesses an "interest assessment surcharge" to pay off the interest on its federal loan.
Under the deal hatched this year, New York dipped into its reserves to pay off its debt, allowing it to eliminate the interest charge on businesses. In return, employers -- who fund the unemployment account through a quarterly payroll tax -- agreed to a big increase in the maximum unemployment pay, which wasn't expected to rise again until 2031 if the state had taken no action.
New Yorkers who are collecting unemployment and entitled to an increase will get one automatically, without having to do anything. According to the state Department of Labor, some 27% of current beneficiaries will get the new maximum of $869 per week, a leap from the current $504. In annual terms, that amounts to rising to about $45,000 a year from $26,000.
Another 28% of beneficiaries are expected to see an increase but get less than the full $869. Payments are calculated as a percentage of the recipient's highest pay in the preceding year.
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New Yorkers who lose their jobs through no fault of their own are entitled to unemployment pay for up to 26 weeks, the cutoff that most states use. Sixteen states stop benefits sooner than 26 weeks -- as early as 12 weeks in four states -- and only Massachusetts extends them longer, to 30 weeks. New York's unemployment rate was 4% in August, according to the U.S. Bureau of Labor Statistics.
Chris McKenna covers government and politics for The Journal News and USA Today Network. Reach him at [email protected].