Benefits to run out for jobless Ohioans

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Exhausted unemployment benefits:

The decline in unemployment has resulted in a reduction to the amount of federal unemployment benefits Ohio residents can collect. Since April 7, the maximum number of weeks of unemployment compensation has decreased to 73 weeks from 99 weeks. Here is the estimated total of local unemployed people who will lose benefits by the end of 2012.

So far this year, more than 50,000 Ohioans have exhausted their federal extended unemployment benefits, and those still receiving benefits are facing stiffer eligibility requirements.

State jobs officials recently adopted two new rules for receiving unemployment checks in accordance with the Middle Class Tax Relief and Job Creation Act of 2012, which extended federal benefits through the end of this year.

Ohio now requires all claimants to prove that they have been actively seeking work to qualify for state and federal benefits. In Ohio, federal benefits kick in after 26 weeks of state benefits have been exhausted.

In the past, Ohio jobs officials conducted random audits to make sure claimants were meeting the requirement, which the state defines as making contact with at least two different employers each week.

But since April, all claimants have been required to submit the names of at least two potential employers with their weekly applications for benefits, said Ben Johnson, a spokesman for the Ohio Department of Job and Family Services.

“There’s no longer the opportunity for someone to hope that they won’t be pulled for a random audit and not actually search for work,’’ Johnson said. “This is a more intensive and hands-on approach to finding job opportunities for people collecting unemployment compensation.’’

In addition, claimants are now required to participate in re-employment counseling at their local job centers within six weeks of collecting their first federal benefits check.

“We want to make sure people make contact with someone at a one-stop center to talk about their job searches, job opportunities and what training opportunities might be available,’’ Johnson said.

Failure to meet the new requirements could result in a suspension of benefits.

Regardless, unemployment checks will stop coming for hundreds of thousands of Americans — including about 300,000 Ohioans — by the end of the year, unless Congress acts to reinstate them. In the Miami Valley, that could be more than 28,200 currently unemployed people.

That could drive many local residents into bankruptcy, even foreclosure, according to at least one national expert.

“People who can’t find work and those who have just quit trying have adjusted their lifestyles to live on unemployment payments, which has contributed to the reduction in bankruptcy filings over the last two or three quarters,’’ said David Jones, president of the Association of Independent Consumer Credit Counseling Agencies.

“Unfortunately, there may be little help available for this segment of debtors because the loss of their last lifeline, unemployment payments, will likely leave them few options.’’

The extension of federal benefits for a duration of up to 99 weeks at the height of the recession was triggered by double-digit unemployment in hard-hit states like Ohio and intended to help displaced workers weather the storm until the job market improved.

But a steady decline in the jobless rate over the past couple of years has cut many extended benefits claimants off prematurely.

By March, Ohio’s unemployment rate had dropped to 7.5 percent from 8.8 percent a year earlier and the state no longer qualified for the final 20 weeks of extended benefits, affecting about 19,000 claimants, according to the state jobs department.

Nationwide, close to a half million jobless workers have been cut off early from extended benefits, according to a recent analysis by the National Employment Law Project.

Some economists think cutting back extended benefits could actually help stabilize the economy and bring down unemployment by eliminating a disincentive for unemployed workers to look for jobs.

“Like all government benefits, people get hooked on the candy,” said Ken Mayland, an economic forecaster and president of Clearview Economics in suburban Cleveland.

But the jobs picture remains bleak for the people who have been out of work the longest and have the most difficulty finding work. And those are the people relying on extended unemployment benefits.

After a robust start to the year, the economy added a meager 69,000 jobs in May and the unemployment rate edged up to 8.2 percent, the U.S. Department of Labor reported last week.