U.S. DEPARTMENT OF LABOR
Employment and Training Administration
Washington, D. C. 20210

CLASSIFICATION

 

CORRESPONDENCE SYMBOL

 

ISSUE DATE

October 17, 1993

RESCISSIONS

None

EXPIRATION DATE

October 31, 1994

 

DIRECTIVE

:

GENERAL ADMINISTRATION LETTER NO. GAL 12-92, Change 5

 

TO

:

ALL STATE EMPLOYMENT SECURITY AGENCIES

 

FROM

:

Barbara Ann Farmer
Administrator for Regional Management

 

SUBJECT

:

Emergency Unemployment Compensation Act of 1991, as Amended -- Clarification

 

  1. Purpose: To provide State Employment Security Agencies (SESAs) with a clarification of the instructions for the administration of Section 102(b)(2)(B) of P.L. 102-318.

  2. Contact: Direct questions to the appropriate Regional Office.

  3. References: Title I of the Emergency Unemployment Compensation (EUC) Act of 1991, P.L. 102-164, as amended by P.L.s 102-182, 102-244, 102-318, and the Emergency Unemployment Compensation Amendments of 1993, P.L. 103-6; the Federal-State Extended Unemployment Compensation Act of 1970, as amended; 20 CFR Part 615; GAL 12-92 (57 Fed. Reg. 54106) and Changes 1-4, (58 Fed. Reg. 34484) ; UIPL 9-92 and Changes 1-5; UIPL 45-92 (57 Fed. Reg. 47871, 47873); GAL 7-93, dated March 5, 1993.

  4. Background: GAL 12-92, dated September 11, 1992, and published in the Federal Register on November 16, 1992 (52 Fed. Reg. 54106) consolidated earlier operating instructions for the EUC program based on the amendments to the EUC Act of 1991 and other provisions of P.L. 102-318. This document became the official controlling guidance for the States and the cooperating State agencies in the administration of the EUC program.

    In response to questions received from the States and other interested parties, the Department issued UIPL 9-92 and Changes 1- 5. These UIPLs have provided the States and cooperating State agencies with responses to various questions that have arisen regarding the administration of the EUC program. Some State agencies' questions, concerning the answer to one question in Change 5, indicate a need for clarification of the operating instructions with respect to Section 102(b)(2)(B) of P.L. 102-318. This GAL clarifies the implementation of Section 102(b)(2)(B) of P.L. 102-318, provides guidance with respect to the handling of improper payments, and revises Section III.C.2. of Attachment A to GAL 12-92 for the reasons described below.

  5. Controlling Guidance: The revised operating instructions in this GAL 12-92, Change 5, are issued to the States and cooperating State agencies and constitute the controlling guidance provided by the Department in its role as the principal in the EUC program. As agents of the United States, the States may not vary from the operating instructions in GAL 12-92 and GAL 12-92, Changes 1-4, or this Change 5 (or any subsequent or supplemental operating instructions) without the prior approval of the Department of Labor.

  6. Clarification: Section 102(b)(2)(B) of P.L. 102-318 provides that an individual with a current (subsequent) benefit year, as of July 3, 1992, that was established after the enactment of the EUC Act (November 15, 1991), may defer the receipt of regular benefits in order to receive EUC based on the prior "applicable benefit year," until rights to such EUC benefits are exhausted. This section is effective for weeks of unemployment beginning after July 3, 1992. Questions have been raised regarding when rights to benefits based on a prior benefit year are exhausted. That is, whether EUC, based upon the first (prior) benefit year, may be paid after the end of the second (subsequent) benefit year, or whether those EUC rights terminate at the end of the second benefit year.

    The definition of "applicable benefit year" at 20 CFR 615.2(c)(2) applies in determining the prior benefit year upon which EUC is payable. This regulation provides that the "applicable benefit year" shall be the claimant's current benefit year or most recent benefit year ending in the extended compensation period. Therefore, a claimant exercising an option under Section 102(b)(2)(B) to defer rights to regular compensation in the current (subsequent) benefit year, in order to receive EUC attributable to a prior benefit year, has rights to such EUC only during the period that the prior benefit year is the "applicable benefit year" for EUC purposes. Hence, when the claimant's rights to regular benefits based on the current benefit year are exhausted, either monetarily or by virtue of the benefit year expiring, this subsequent benefit year now becomes the claimant's "applicable benefit year" for extended compensation purposes, and all rights to benefits based on the prior "applicable benefit year" are exhausted. See also 20 CFR 615.(h)(2).

    This interpretation produces the identical results for an individual covered by Section 102(b)(2)(B) of P.L. 102-318 as is produced by Section 101(f) of the EUC Act. In both cases, the individual receives EUC based on the "applicable benefit year" (i.e., the most recently expired or exhausted benefit year). This interpretation is applicable to all weeks of unemployment beginning after July 3, 1992.

  7. Amendment to Operating Instructions: The revised operating instructions in this GAL 12-92, Change 5, are issued to the States and cooperating State agencies and constitute the controlling guidance provided by the Department in its role as the principal in the EUC program. As agents of the United States, the States may not vary from the operating instructions in GAL 12-92 and GAL 12-92, Changes 1-4, or this Change 5 (or any subsequent or supplemental operating instructions) without the prior approval of the Department of Labor.

    At the end of Section III.C.2. of Attachment A of GAL 12-92, insert the following new paragraph:

    "When the current benefit year (subsequent), of an individual who has exercised an option to postpone regular benefits to receive EUC, ends, the subsequent benefit year becomes the "applicable benefit year" for EUC purposes as defined in 20 CFR 615. Therefore, all rights to EUC based on the prior benefit year are exhausted. Any further EUC entitlement must be based on the most recently expired/exhausted benefit year."

    Guidance for Handling Improper Payments: Some claimants were paid EUC based on the "prior" benefit year after their rights to EUC based on that benefit year were exhausted. In order to correct the problem, States will have to review the payment history of each individual who exercised an option in accordance with Section 102(b)(2)(B) of P.L. 102-318 to determine if a payment was issued, on the EUC claim based on a prior benefit year, after the benefit year ending date of the subsequent claim.

    When it is determined that an individual has been improperly paid benefits under one program (or based on one claim) and was entitled to benefits for the same week(s) of unemployment under another program, procedures permitting the necessary payment adjustments to be made by correcting the bookkeeping charges are appropriate. In correcting these improper payments, those claimants, with no regular entitlement or those who exercise an option to postpone establishing a new benefit year pursuant to Section 101(f) of the EUC Act, are entitled to EUC based on the "subsequent" benefit year for the same weeks that were previously paid. Others with regular entitlement and who do not exercise an option to receive EUC will be entitled to regular benefits for the same weeks that were improperly paid.

    In making the adjustments, the week(s) claimed and associated payment(s) is transferred to the claim where the entitlement exists. If the payment for the week is the correct amount of compensation, the claimant would have received the amount to which he/she is entitled. If the payment made was less than the appropriate entitlement, an adjustment payment would be issued. However, if the payment exceeds the entitlement for the week paid, the excess amount would be a non-fraudulent overpayment and would be handled under the appropriate Federal or State law, rules or regulations with respect to the program (of entitlement) where the overpayment exist.

    If the payment transfer results in an EUC overpayment, the requirements of Section 105 of the EUC Act, including the waiver provisions, apply. The waiver provision of Section 102(b)(2)(A) of P.L. 102-318 does not apply in this situation as it is specific to EUC benefits to which an individual would have been entitled if the individual was not eligible for regular benefits prior to the enactment of P.L. 102-318.

  8. Effective Date: The operating guidance contained in this directive shall be implemented immediately. If procedures consistent with the guidance provided in this directive have not been previously followed, a corrective action plan must be submitted to the appropriate Regional Office no later than 30 days after the issuance of this GAL 12-92, Change 5.

  9. Action Required: SESA administrators shall:

    1. Provide the controlling guidance contained in this directive to appropriate staff;

    2. Ensure that payments to individuals who exercised an option under the provisions of Section 102(b)(2)(B) of P.L. 102-318 conform to the requirements as explained in this GAL;

    3. Submit a corrective action plan, if required to do so under paragraph 7 above, to the appropriate Regional Office no later than 30 days after the issuance of this directive; and,

    4. Where EUC payments to individuals exceeded Federal or State benefit entitlement for the weeks paid, ensure that the implementation includes the proper accounting for EUC payments and the establishment of overpayments, as appropriate.