Budget Cuts Reduce Unemployment Benefits

Why the unemployed are seeing smaller checks

Federal budget cuts are taking a big bite out of the unemployment checks for the long-term jobless. Precisely how those cuts are being carried out varies by state. Most are enacting an across-the-board reduction for all federal unemployment insurance recipients, but some are ending the program early or slashing benefits only for new enrollees.

And in some states, recipients should brace for an upcoming shock. The places that took the longest to implement the cuts will need to compensate by slicing off a bigger chunk of recipients' remaining checks.

Federal unemployment insurance, which kicks in when state benefits run out, is one of the programs caught up in the forced budget cuts known as sequester. An estimated 3.8 million people will see their federal payments reduced this fiscal year, which ends in September.

Federal benefits can last up to 47 weeks. State benefits, which last up to 26 weeks, are not affected.

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The overall cut equals about 10.7% of each recipient's benefits this year, or an average of about $450 per person.

Some states began trimming their payments right after sequestration began in March. For others, the hit is still looming.

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