By Walter F. Roche Jr. / The Tennessean
Faced with the possible cutoff of millions of dollars in federally funded benefits for 22,000 unemployed residents, Tennessee state labor officials have put off a planned cut in benefits for the unemployed with dependent children until next year.
The cutoff of funding for dependents had been scheduled to go into effect July 1, but was delayed temporarily when state officials said they first learned that it would trigger aid to the 22,000 getting supplemental federally funded benefits.
In a statement issued Friday, Labor and Workforce Development Commissioner Burns Phillips called the delay "part of the balancing act with federal funding."
State officials they were advised by the U.S. Department of Labor in late June that cutting the payments for dependents, which are capped at $50 a week, would automatically trigger a much larger cut in federally funded benefits known as emergency unemployment compensation.
The cutoff of funding to dependents was approved by the Tennessee General Assembly under a measure approved in the recently ended session.
"It is critical that the unemployment insurance trust fund is sustainable," Phillips said in announcing the decision. In this situation, we had to balance the potential savings to the trust fund with the total impact of those receiving federal unemployment benefits."
According to state officials, the extra benefits for dependents were initiated in 2010 with funding from a one-time federal grant of $141.8 million from stimulus funding.
State officials said that the federally funded emergency unemployment program now serving those 22,000 residents is set to expire at the end of the calendar year so the cut in dependent benefits can go into effect Jan. 1 without any federal funds being at risk.