Unemployment Trust Fund Balance Grows to $205 MillionPosted on Nov 4, 2022 in News
DEPARTMENT OF LABOR AND INDUSTRIAL RELATIONS
DAVID Y. IGE
FOR IMMEDIATE RELEASE
November 4, 2022
UNEMPLOYMENT TRUST FUND BALANCE GROWS TO $205 MILLION
$847 Million in Pandemic Funds Used to Support Trust Fund
HONOLULU — The Hawai’i State Department of Labor & Industrial Relations (DLIR) today announced that the Unemployment Compensation Trust Fund (UCTF) balance totals $205 million. Due to the unprecedented volume of unemployment insurance claims resulting from the COVID-19 Pandemic, $600 million in the UCTF was rapidly depleted and $847 million from federal pandemic funding was used to avoid having employers pay the accrued interest on loans from the U.S. Department of Labor (Title XII).
“The DLIR paid out nearly $6.5B in unemployment insurance benefits and assistance as a critical part of the safety net during the COVID-19 Pandemic,” said Gov. David Ige. “With the assistance of the Legislature we have minimized significant impacts to our business community and stewarded the fund to a positive balance.”
Hawaii’s unemployment insurance (UI) program is funded exclusively by employers via state and federal payroll taxes on wages. The system is designed to replenish the UI fund during times of economic growth in preparation for high unemployment during recessions. Payroll taxes rise and fall, depending on the condition of the UI safety net. Currently, other states owe billions to the U.S. Treasury for UI loans, including California at $18 billion and New York at $8 billion. Employers in these states are paying increasing rates of federal UI taxes to cover the loans and interest, up to a maximum of $420 per employee per year.
“Gov. Ige has also allocated $42.5 million to expand the Hawaii Unemployment Insurance Modernization (HUI-MOD) project,” said DLIR Director Anne Perreira-Eustaquio. “Expanding the scope of the HUI Mod project to replace the aging, legacy mainframe system strengthens the UI safety net and prepares it for the next economic downturn.”
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