Originally Published: June 5, 2013 11:40 a.m.
Recipients of long-term unemployment benefits in Arizona will see their maximum benefits drop from $240 to $200 a week effective immediately because of federal budget cuts.
The reduction in benefits will affect unemployed people if they have been receiving benefits for longer than 26 weeks, known as emergency unemployment compensation funds, the Arizona Department of Economic Security announced. DES administers unemployment benefits in Arizona.
The reduction resulted from the Budget Control Act of 2011, commonly referred to as "sequestration," which requires across-the-board budget cuts to many federal programs, DES stated in a news release Friday.
DES mailed out approximately 23,455 notices to long-term claimants May 31 to advise them of the changes in benefits. Current long-term claimants also will receive a separate wage statement that includes their new benefit balance and weekly benefit amounts.
A total of 1,017 people in Yavapai County receive unemployment benefits, and 568 of them receive extended benefits, said Nicole Moon, a public information officer for DES in Phoenix. The extended benefits last for a total of 28 weeks, she said.
The reduction in benefits might affect David Neighbors, a 29-year-old Prescott resident who said he was laid off from his job as a landscape architect in Phoenix about a year ago. Neighbors, who grew up here and moved back to the Prescott area six months ago to stay with his parents, filed a weekly unemployment claim Tuesday afternoon on a computer in the Prescott Public Library.
He said he learned this week about his benefits being cut.
"That's a lot of money," Neighbors said. "I'm obviously not very happy about it."
He said it is "tough" living on $240 a week.
"I'm living off of my savings," Neighbors said. "That goes by pretty quickly."
Neighbors, who has worked in the landscaping field for 15 years and earned a bachelor's degree in landscape architecture from Arizona State University, said he is looking for a temporary job, adding, "I've had a few opportunities come around."
Neighbors said he is thinking about returning to college to earn a degree in a journalism, a profession that has been battered since the Great Recession arrived in December 2007.
"Obviously, the construction industry is not flourishing right now," he said.
The reduction in unemployment benefits also will increase demand on services that the Northern Arizona Council of Governments Yavapai Workforce Connection provides, Regional Director Teri Drew said.
"Folks are going to be losing income, however little it is," Drew said. "Their need for job placement is going to grow.
Drew said the NACOG office on 221 N. Marina St. provided employment services to more than 17,500 people from this past July 1 through April, and expects those numbers to grow by 25 to 45 percent with jobless benefits being cut.
"The unemployment rate is dropping a little bit, but the underemployment rate is going up," Drew said. She used the word underemployment to refer to people who are earning less than they made in previous jobs.
She described unemployment benefits as "sustainable income" that pays for groceries - and little else.
"It does not pay the mortgage," Drew said. "It does not pay the car payments."
The $40 cut in weekly benefits means the unemployed will spend less on services, thus hurting the overall economy, Drew said.
Meanwhile, DES is advising the long-term unemployed against contacting the UI Call Center regarding the weekly cut unless they believe an error exists in the reduction applied to their claim. Claimants also may access information online at www.azui.com.