NASHVILLE - Tennessee Labor and Workforce Development Department Commissioner Burns Phillips announced the state will continue to provide additional unemployment benefits to eligible claimants with dependent children through Dec. 31, 2013.
Doing so affects 12,000 claimants and keeps an estimated 22,000 Tennessee children from immediately losing their federal unemployment benefits.
Officials recently had announced their intention to end the benefits July 1 based on a law passed by the Legislature this year because one-time federal funding was no longer available.
State officials say the U.S. Department of Labor previously had given the department guidance that ending the additional benefits wouldn't affect other funds. But the state suspended its plans earlier this month and blamed federal labor officials, who they say reversed their position and warned ending additional benefits would risk funding for extended federal benefits.
In a statement, state Labor Commissioner Burns Phillips said "this is part of the balancing act with federal funding, and our department's focus continues to be efficiently and effectively serving Tennesseans who need temporary unemployment assistance."
He called it "critical that the Unemployment Insurance Trust Fund is sustainable. Often there are conditions regarding how federal funding may be used, and in this situation we had to balance the potential savings to the trust fund with the total impact of those receiving federal unemployment benefits."
During the height of the Great Recession, Tennessee in 2009 received one-time federal funds in the amount of $141 million as an incentive grant under the American Recovery and Reinvestment Act to strengthen the state's fast-depleting Unemployment Insurance Trust Fund.
As a result of that, eligible unemployment insurance claimants supporting minor children in 2010 began receiving an additional allowance to their weekly unemployment benefit amount.
At the end of December 2013, the Federal Emergency Unemployment Compensation program is set to expire, and the additional dependent benefits are expected to end.