What Happens When Texas Unemployment Benefits Run Out?

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Unemployment insurance (UI) benefits are intended to serve as a financial bridge for a worker who is between jobs. In Texas, an employee who is out of a job through no fault of their own and who meets certain financial requirements can apply for, and get, up to 26 weeks of UI benefits. Federal pandemic UI programs extend the period of time that state UI benefits are available. An individual who is still unemployed after their state benefits periods has passed are eligible for extended UI coverage for an additional 13 weeks. Sometimes, claimants are also eligible for high unemployment program benefits of an additional seven weeks.

TL;DR (Too Long; Didn't Read)

Under Texas state unemployment insurance laws, benefits are available to qualified claimants for up to 26 weeks. Federal pandemic UI legislation has extended the duration to 70 weeks. Those still unemployed may be eligible for 13 additional weeks of extended state benefits and seven additional weeks of high unemployment period benefits.

State Unemployment Coverage in Texas

Generally, all unemployment insurance benefits available to Texans is state coverage, and eligibility is determined on a case-by-case basis by the Texas Workforce Commission (TWC). State benefits are available to employees who lost their jobs due to no fault of their own, earned a certain minimum amount of income in the recent past and are ready for, and seeking, a new job.

The financial requirements involve a base period defined under Texas law as the 12-month period before the person filed a claim. The state identifies the five most recent complete calendar quarters, such as January through March, before the claim was filed, then uses the first four of them as the base period. To qualify for UI benefits, the individual must have worked during at least two of those quarters, and the benefit is calculated as one-25th of the amount earned in the highest income quarter, with a minimum of $70 and a maximum of $535.

State benefits are generally available for 26 weeks. An individual's maximum benefit amount is the total amount an individual can receive during the benefit year. It is calculated as 26 times the weekly benefit amount or 27 percent of all wages in the base period, whichever is less.

Federal Pandemic Coverage

In extraordinary circumstances, the federal government will step in and supplement state UI benefits. When COVID-19 was declared a pandemic in March 2020, and many businesses were shut down, the federal government passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The law expanded eligibility for state UI benefits to independent contractors, the self-employed and gig workers and provided supplemental payments for the unemployed. The Pandemic Emergency Unemployment Compensation (PEUC) was part of the CARES Act and extended unemployment benefits for 13 weeks after state benefit payments are exhausted.

The CARES Act benefits were extended from their original end point by two successive pieces of federal pandemic legislation. UI benefits are available for a total of 70 weeks, and include a supplemental $300 in federal Pandemic Unemployment Assistance (PUA) in addition to state benefits. These federal benefits run through September 6, 2021, but may be extended again depending on the state of the country's unemployment as of that date.

Extended State UI Benefits

The Texas Extended Benefits Program is only available during periods of high rates of Texas unemployment or national unemployment. This program becomes available when the 12-week Insured Unemployment Rate is 5 percent or more, as determined by the federal Department of Labor. This occurred as of May 31, 2020, when the Texas unemployment rate was 12.8 percent, exceeding the threshold to trigger the extension. The federal Department of Labor notified the TWC of this in early June, 2020.

Extended state UI benefits are payable for up to 13 additional weeks, and the cost of these additional benefits are split between the federal government and the state government equally. To qualify for extended benefits, the claimant must have exhausted their regular claim for UI benefits in Texas and also exhausted the federal PEUC pandemic benefits. In addition, the individual's total base period wages of the original UI claim must be at least 40 times the weekly benefit amount or else equal to or greater than 1.5 times the highest quarter’s earnings.

Applying for Extended Benefits

There is no need for an individual to apply for these extended benefits. The TWC automatically enrolls qualified claimants in the program and notifies them that their benefit duration has been extended. Assuming that the claimant is still unemployed, they can continue filing their payment request every two weeks.

How much will a worker get in extended benefits? A worker's weekly benefit amount for a state-extended benefit claim is the same amount of money that the worker received for the regular unemployment insurance claim when they first applied. The maximum benefit for state extended benefit is 50 percent of the regular UI claim’s maximum benefit amount (37 times the weekly benefit) and pays up to 13 weeks of unemployment benefits.

High Unemployment Period Benefits

A Texas claimant may be entitled to an additional seven weeks of state benefits if there is a High Unemployment Period (HUP) in the state. This must be calculated, and announced, by the federal Department of Labor.

A HUP occurs when the unemployment rate in Texas for the most recent three-month period equals or exceeds 8 percent. During a HUP, all claimants who have exhausted their regular and extended benefit programs are eligible for an additional seven weeks of UI benefits. But these HUP benefits come to a screeching halt when the unemployment rate in Texas falls below the 8 percent requirements.

The maximum benefit amount for HUP assistance is 30 percent of the claimant's regular UI claim’s maximum benefits amount. Alternatively, the HUP amount is paid for up to seven weeks. Again, there is no need for the claimant to apply for HUP benefits. This is done automatically by the TWC. All the individual needs to do is continue to claim benefits every two weeks.