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New Maximum Rates for Unemployment Insurance and Temporary Disability Insurance

The RI Department of Labor and Training has announced the 2012 maximum weekly benefit rates for Unemployment Insurance and Temporary Disability Insurance for claimants who begin their benefit year on or after July 1, 2012.

Unemployment Insurance: The maximum weekly benefit rate for Unemployment Insurance in Rhode Island will remain at $566 for claimants who are without dependents and who will begin their benefit year on or after July 1, 2012. A benefit year is the 52-week period that starts upon the filing of a new claim.

Due to Unemployment Insurance reforms taking effect July 1, 2012, the maximum weekly benefit rate will remain at $566 until such time as that figure reaches 57.5 percent of the state average weekly wage. In previous years, the maximum weekly benefit rate was calculated at 67 percent of the state average weekly wage. The new benefit rate is equal to 65.5 percent of the state average wage of $864.81. The department expects the rate to remain at $566 until fiscal year 2017 or 2018. Similarly, the maximum weekly benefit rate for UI claimants with five or more dependents will remain at $707 this year.

Director of the RI Department of Labor and Training Charles J. Fogarty says, "This is the first time in more than 40 years of the Unemployment Insurance program that a new maximum benefit rate has not exceeded the previous year's maximum." This change in calculation is anticipated to save the state Unemployment Insurance Trust Fund $2.2 million in the first year and $12.3 million every year when fully implemented.

Another change in Unemployment Insurance benefits to take effect July 1st is a reduction in the percentage of replaced wages from 60 percent of an individual's average weekly wage to 57 percent. This percentage will be reduced to 54 percent in July 2013 and 50 percent in July 2014, at which time Rhode Island's Unemployment Insurance benefit structure will fall in line with its neighboring states. This change in the percentage of replaced wages will save the trust fund $5.4 million in the first year and $24.9 million when fully implemented.

Other changes legislated to begin July 1st include allocating severance over time prior to paying out Unemployment Insurance benefits, calculating weekly benefit rates using the average of a claimant's two highest quarters of work rather than using the highest quarter only, and extending the number of weeks a claimant must have worked in order to receive the maximum weeks of benefits. Together, these three changes are expected to save the state more than $8 million each year.

Fogarty stresses that the new changes will only affect new claims begun in July 2012 or later. "Existing claims will not be affected by the changes in benefit rate calculation," Fogarty says.

The Unemployment Insurance program provides benefits to insured and eligible persons who are out of work through no fault of their own. Benefits are financed by employer contributions.

Temporary Disability Insurance: The 2012 maximum weekly benefit rate for Temporary Disability Insurance (TDI) is $736 for claimants who are without dependents and who begin their benefit year on or after July 1, 2012. The new maximum weekly benefit rate constitutes an increase of $17 over the previous year's maximum. The maximum weekly benefit rate for TDI claimants with five or more dependents is $993, an increase of $23.

The maximum weekly benefit rate for TDI is calculated at 85 percent of the average weekly wage of covered workers.

New legislation enacted this year (Public Laws 12-033 & 12-042) will eliminate the one-week waiting period before TDI claimants can receive benefits for all new claims with benefit years beginning on or after July 1, 2012.

The Temporary Disability Insurance program protects workers against wage loss resulting from a non-work-related illness or injury, and is funded exclusively by Rhode Island workers.

Related links

Department or agency: Department of Labor and Training

Online: http://www.dlt.ri.gov/

Release date: 06-27-2012

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