Date Requested:January 13, 2011
Time Requested:01:30 PM
Agency: Workforce WV
CBD Number: Version: Bill Number: Resolution Number:
2011R1178 Introduced HB2344
CBD Subject: CERTAIN RETIREMENT INCOME AS DISQUALIFICATION
FUND(S)
UI Trust Fund
Sources of Revenue
Other Fund UI Trust Fund
Legislation creates:
Neither Program nor Fund

Fiscal Note Summary

Effect this measure will have on costs and revenues of state government.

    During CY 2010, 754 claimants filing for unemployment benefits had a pension. Of those, 332 claimants who received monthly pension payments, had their weekly amount reduced or, in some cases, benefits denied due to excessive amount of pension. The remaining 422 claimants with a pension had mostly one week of benefits denied due to a lump sum annuity/pension payment. Based on this claims information, we estimated an additional cost of $1,624,635 in Unemployment Compensation (UC) benefits. We could assume that some additional unemployed workers with an annuity or pension would apply for unemployment benefits if pension payments were not a disqualifying issue. However, we can only guess at what the cost of benefits would be for these individuals. For the purposes of providing a full estimate of cost, we added $1,000,000 to our cost estimates for these additional claimants which would equal a total of $2,624,635 in benefit cost.

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2011
Increase/Decrease
(use"-")
2012
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 0 0
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 2,624,635 2,624,635 2,624,635
2. Estimated Total Revenues 0 0 0
3. Explanation of above estimates (including long-range effect):
    Our calculations are as follows:
    Claimants with Monthly Pensions whose weekly benefit amounts were reduced.
    Total amount of Pensions (332 Claimants) $ 96,357
    Adjustment for Pensions above the WBA ($ 16,725)
    One Week of additional UC Benefits $ 79,632
    Average Weekly Duration of UC Benefits (9/2010) 18.6
    Total Benefit Cost for claimants with Monthly Pensions $1,481,155
    
    Claimants with a Lump Sum Payment of Annuity or Pension.
    Total Number of Claimants with a Pension 754
    Claimants with a Weekly Deduction (332)
    Claimants with one Week Deduction only 422
    Average Weekly Benefit Amount of Claimants with Pension $ 340
    Total Benefit Cost for Claimants with One Denied Week $ 143,480
    
    Total Cost for Removal of annuity, pension or other retirement pay as a disqualification for or reduction in UC Benefits.
    Total Benefit Cost for claimants with Monthly Pensions $1,481,155
    Total Benefit Cost for claimants with one Denied Week $ 143,480
    Estimated Cost for Additional Claims Filed with a Pension$1,000,000
    Total Estimated Annual Benefit Cost $ 2,624,635
    


Memorandum
Person submitting Fiscal Note:
Caren Jenkins
Email Address:
Caren.R.Jenkins@wv.gov
    Since the claims load was high in 2010, we do not expect an increase in benefit cost for the next few years as the unemployment rate is expected to decrease.
    
    Administrative Cost - None
    
    An increase in processing additional claims should be offset by a reduction in the number of decisions issued; therefore there should not be any change in administrative cost.