Explaining Idaho’s UI Tax System – Claimants and Benefits

Idaho’s unemployment insurance (UI) program is generally like any other insurance program. It has the same basic components – an intake of funds from insured entities that go into a pooled reserve from which pre-established, eligible losses some experience are covered (Grollier, 2003). Where it differs is it is government run and the source of funds is taxes on employers pooled into a regulated trust fund, with the output the replacement of partial wages for eligible workers.

Though the basic components are similar, this straightforward comparison is too simplistic for the complex UI machine. Explaining how modern cars work by describing the basic components of an engine combusting gasoline to make wheels turn around and around does not really provide enough insight into the inner workings of the car to understand how it works. There is more to a car’s operation and to make it is easier understand, it’s useful to focus in on one aspect at a time. For our overview of the UI program we will take the same approach and focus on benefits and claimants.

As with other aspects of Idaho’s UI program, the determination of claimant eligibility and the nuances of benefits was developed through a decades-long process of debates, negotiations and successive legislative sessions stretching back to the 1930’s. Idaho’s code has evolved into one in which the UI program adjusts itself automatically to the economic climate and factors of growth. This is reflected in some of the aspects that Idaho statute currently sets for claimants to be eligible for benefits and includes:

  • Must be monetarily eligible by having worked and earned $1,872 in wages during at least one quarter and no less than $2,340 in total during the “base period.”
    • The standard base period is the first four of the five most recently completed calendar quarters at the time a claim is filed.
    • An alternate base period is allowed if reporting lags and a claimant’s employment is too recent to fulfill the standard base year requirement.
    • By statute, monetary eligibility minimum amounts are indexed to the minimum wage, currently set to the federal minimum of $7.25 per hour.
  • Must be personally eligible by being unemployed through no fault of their own, be able and available for full-time work, actively seeking work or returning to work for their employer.
  • Claimants have the right to appeal if found ineligible.

The amount of benefits and duration an eligible claimant can receive them is then determined and includes:

  • Eligible claimants are paid a weekly benefit amount of no less than $72 or more than $463 per week in 2021, or $499 per week in 2022.
    • The amount for an individual claimant is determined by dividing the wages during the benefit period by 26.
    • Benefit amounts, including the minimum and maximum possible, are set by Idaho statute.
    • The maximum amount is set by formula to automatically adjust to 55% of the state’s average weekly wage paid by covered employers during the preceding year.
  • Following a one-week waiting period, the duration of paid benefits lasts a minimum of 10 weeks and a maximum that changes each quarter based on a sliding scale depending on Idaho’s unemployment rate. The higher the unemployment rate, the higher the maximum number of weeks a claimant can receive state UI benefits.
    • The maximum number of weeks possible under statute is 26 weeks.
    • The current maximum of 20 weeks is based on the August 2021 unemployment rate of 2.9%.
  • The number of weeks for a specific claimant is determined by the ratio of their total base period earning to the highest quarter base period earnings.
  • For each week a claimant wants payment, they must do a weekly certification which is also known as the continued claims process.
    • Weekly certification questions determine eligibility for benefits for that week.
      • If the claimant reports something potentially in conflict with state law or rule, a pending issue is posted, and a Labor representative must investigate the issue.
      • If there is no issue, the claimant will be paid following the mandatory waiting week where no benefit is paid.
    • If the claimant does not do a weekly certification, eventually their claim goes inactive and no action is ever taken on the claim.
    • A claim is good for one year so claimants may draw weeks, return to work, then come back later and draw additional weeks.
  • It should also be noted that benefits paid to Idaho claimants are subject to federal and state income tax.

Even with the specific nuances of Idaho’s UI tax code, many claimant eligibility and benefit aspects of the program are very similar to most other programs in the U.S. The self-adjusting maximum number of weeks is one aspect of Idaho’s code that is unique or rare among the states. In the next installment of this series, we will explain aspects of Idaho’s UI trust fund, taxes on employers and the interaction between the two.

Misconceptions about Unemployment Benefits and Claims:

There are number of misconceptions regarding UI beneficiaries. The most common is the assumption that everyone unemployed is claiming and getting unemployment benefits – which conflates the distinct concepts of unemployment and UI together into the same thing.

Each month, when the Bureau of Labor Statistics releases the total number of unemployed, that number includes anyone 16 years or older without a job who is looking for work. By this measure 23,800 Idahoans were unemployed in November and only 11% of this number were paid UI benefits. The reason for this difference is that the concept of unemployment captures more than those “on unemployment.” Unemployment data includes anyone who may have just joined the labor force such as youth entering the job market for the first time or individuals who moved into the state and are looking for work or those returning to the labor force after focusing solely on education or care-providing for family. While some of these situations are more prevalent than others, it illustrates that there are many more reasons a person may be unemployed other than having recently lost a job.

This brings us to the other misconception that anyone who becomes unemployed gets benefits under the UI program. As explained previously, it is only under the condition that an eligible person who has lost a job through no fault of their own can they claim benefits. Job loss in and of itself is not a sufficient qualification for benefit. In addition, self-employed people do not pay insurance tax into the system and are therefore uninsured. They are not eligible to receive benefits should their business slow or close.

– Craig Shaul, research analyst supervisor
Idaho Department of Labor


Part One: Idaho’s Unemployment Insurance Program Part of a National System

Part Three: Explainer on the Unemployment Insurance Trust Fund and Taxes

Part Four: Labor Department works hard to prevent fraud, protect trust fund

Part Five: Unemployment insurance helps the economy as well as individual workers

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