Growth and Jobs Plan – Fact Sheet | Frequently Asked Questions
Personal Reemployment Accounts -
Questions and Answers
1. What is a Personal Reemployment Account?
A Personal Reemployment Account provides certain eligible individuals
currently receiving UI benefits, or some UI exhaustees, with a special
worker-managed account of up to $3,000 (the exact amount to be determined
by the state) to purchase intensive reemployment, training and supportive
services. Account recipients may choose to access and purchase intensive
reemployment, training and supportive services currently available
through the One-Stop Career Center system; use the account funds to
purchase these service offerings from providers outside of the One-Stop
Career Center system or develop a reemployment strategy that combines
services from both components. Allowable uses for account funds include:
career counseling, occupational skills training, skills upgrading,
child care, transportation expenses and financial literacy counseling.
Income support is an allowable use of the reemployment accounts funds,
at state option, but only for those individuals that have exhausted
UI benefits and are engaged in training and/or intensive services
leading to a job.
If a new UI claimant becomes reemployed by his/her 13th UI benefit
payment, any cash remaining unspent in the account will be provided
directly to the worker in cash as a reemployment bonus. The bonus
will be paid to the individual in two installments: 60% at employment
and 40% after six months of job retention. Individuals who do not
find employment by their 13th UI benefit payment will not be able
to "cash out" their account but will continue to be able to purchase
intensive reemployment, training and supportive services for up to
one year from the effective date of the established account.
If an individual who is currently receiving UI or has exhausted all
UI benefits becomes reemployed by the 13th week of the effective date
of the established account, he/she will be able to "cash out" the
account similarly to UI beneficiaries and will receive the bonus in
the two installments described. Individuals who do not find employment
by the 13th week of the effective date of the established account
will be able to continue to use the account to purchase intensive
reemployment, training and supportive services for up to one year
from the effective date of the established account. Once reemployed,
UI benefit exhaustees may not use their accounts for income support.
In certain cases, some individuals may exhaust UI benefits while using
a Personal Reemployment Account established for them prior to UI exhaustion.
In these cases, their account will be administered in much the same
way as that of UI exhaustees.
Personal Reemployment Accounts will be a one-time benefit.
2. Why are these accounts being established?
Personal Reemployment Accounts are intended to: (1) empower job seekers
by giving them more flexibility, personal choice and individual control
while providing access to intensive reemployment, training and supportive
services; (2) reduce the time an individual collects Unemployment
Insurance and speeds his/her return to the labor market; and (3) provide
incentives that promote job retention.
3. Who is eligible for Personal Reemployment Accounts?
Two types of individuals may be eligible for a Personal Reemployment
Account:
(1) individuals receiving Unemployment Insurance (UI) who are identified
by the state as being "likely" to exhaust their regular UI benefits;
and (2) some individuals who have exhausted their UI benefits within
the last three months prior to the Personal Reemployment Account program's
effective date and meet certain criteria.
Individuals who have exhausted their UI benefits may qualify for an
account if they have exhausted all UI benefits within the last three
months prior to the Personal Reemployment Account program's effective
date, and they meet one of the following two criteria: (1) they are
successfully in training, have not completed, and have exhausted UI
benefits and need extra support to complete training (priority should
be given to those who are training for shortage occupations or high
growth industries); or (2) those who worked in industries or occupations
that are declining or no longer functioning in the local labor market
within the past two years. States will have the option of choosing
additional targeting criteria.
4. Generally how will Personal Reemployment Accounts work?
Implementation of the Personal Reemployment Account program will differ
somewhat depending on whether the unemployed worker is currently receiving
UI benefits or has already exhausted his/her UI benefits. The following
is a step-by-step process for each category of account recipient:
The steps leading to obtaining a Personal Reemployment Account for
an unemployed worker receiving UI benefits are:
1. Under current law, an Unemployment Insurance recipient identified
by his/her state as "likely to exhaust" UI benefits must register
with the state's Workforce Investment Act program to become a client
of the already-established network of One-Stop Career Centers. Failure
to do so risks the loss of UI benefits.
2. Recipients who are referred to reemployment services also may
be eligible to receive an account, as determined by the state. Selected
individuals will be offered a Personal Reemployment Account as part
of the services they receive and will be provided with a Personal
Reemployment Account of up to $3,000 administered on their behalf
by the One-Stop Career Center.
3. The individual can continue to be eligible for and receive UI
benefits and will also be free to use core services (e.g., job search,
local labor market information) provided by the public One-Stop
Career Center. If the individual determines the need for other One-Stop
Career Center services such as intensive reemployment services (e.g.,
counseling, case management), training, or supportive services,
he/she must purchase these services with Personal Reemployment Account
funds.
4. Intensive reemployment, training, and supportive services may
be purchased from the One-Stop Career Center, other sources outside
the One-Stop system or a combination of both. The One-Stop Career
Center will provide payouts from the account upon receiving allowable
invoices and cost documentation. Such payouts will reduce the balance
of funds available in the Personal Reemployment Account.
5. If the individual becomes reemployed by his/her 13th UI benefit
payment, any balance remaining unspent in his/her account will be
provided directly to the worker in cash as a reemployment bonus
paid out by the One-Stop Career Center administering the individual's
account. Individuals currently receiving UI may also retain any
balance remaining in the account as a reemployment bonus if they
become reemployed by the 13th week of the effective date of the
account. Full payout will close the account.
6. Individuals will be provided the cash balance in two installments:
60 percent at the time of employment and 40 percent after six months
of retaining a job.
7. When the cash payout is completed, individuals may continue to
use all of the no-cost, automated and staff-assisted basic reemployment
services available at One-Stop Career Centers. They will not, however,
be eligible for intensive reemployment services such as counseling,
case management, training, or supportive services under the Workforce
Investment Act for a period of one-year after cash payout.
8. If the individual does not find employment by their 13th UI benefit
payment, he/she will be able to continue to use the account resources
as administered by the One-Stop Career Center for intensive reemployment,
training or supportive services for up to one year from the effective
date of the established account. Individuals currently receiving
UI who do not find employment by the 13th week of the effective
date of the account, will also be able to continue to use it for
services for up to one year.
The steps leading to obtaining a Personal Reemployment Account for
an unemployed worker who has exhausted benefits:
1. An individual who has exhausted UI benefits within the last three
months prior to the program's effective date may be identified by
the state as qualifying for a Personal Reemployment Account. Individuals
must also meet one of the following criteria: (1) they are successfully
in training now but have not completed it and have exhausted benefits
(with priority for those who are training for shortage occupations
or high growth industries); or (2) they have worked in industries
that are declining or no longer functioning in the local labor market
within the past two years.
States may add additional limiting criteria.
2. Once identified by the state as eligible for a Personal Reemployment
Account, the individual will follow the same steps outlined above
for UI beneficiary account holders. A reemployment bonus will be
available for those entering a job within 13 weeks of the effective
date of the account.
3. States also have the option of allowing UI exhaustees to use
their account funds for income support payments, similar to unemployment
benefits, if they are engaged in training and/or intensive reemployment
services leading to a job.
4. If the individual does not find employment by the 13th week of
the effective date of the account, he/she will be able to continue
to use the account funds for intensive reemployment, training, or
supportive services for up to one year from the effective date of
the established account.
The steps described above may vary from state to state depending on
the operations of the public workforce investment system.
5. How are individuals that are the "likely to exhaust" identified?
By law, after an individual is found eligible to receive Unemployment
Insurance, states identify those recipients "who are likely to exhaust
benefits and will need job search assistance services to make a successful
transition to new employment" and refer these individuals to mandatory
reemployment services. Although each state applies different criteria,
the factors used to identify these workers include local unemployment
rates, prior employment in a declining industry, the participant's
level of education, and the participant's recent job tenure. The primary
objective of this activity is to focus on augmenting reemployment
services to those individuals identified through an early intervention
process for the purpose of facilitating a quick re-attachment to the
labor market. Personal Reemployment Accounts are yet another service
tool that some of these job seekers can access to assist them in finding
work more quickly.
6. How many individuals have already exhausted all UI benefits
within the last three months?
According to recent UI data, 700,000 claimants exhausted Temporary
Extended Unemployment Compensation (TEUC) in the last three months.
7. If a UI exhaustee receives a Personal Reemployment Account,
is there a time limit on using the account?
A UI exhaustee may use the account resources as administered by the
One-Stop Career Center for intensive reemployment, training, or supportive
services for up to one year from the effective date of the established
account.
8. For those UI exhaustees that are eligible and receive a
Personal Reemployment Account, can they also receive public assistance
funds?
Yes. The receipt of a Personal Reemployment Account does not make
a UI exhaustee ineligible for public assistance. States will determine
exactly which UI exhaustees will be eligible and receive Personal
Reemployment Accounts.
9. Will the receipt of funds from Personal Reemployment Accounts
have an adverse effect on an individual's ability to be eligible for
full UI benefits?
No. An individual will continue to be eligible for and receive full
UI benefits. Generally, only income from employment, pensions, or
self-employment will cause states to reduce payment of UI to the individual.
10. Is this duplicative of the allowable activities under
the Workforce Investment Act (WIA)?
No. The objective of the Personal Reemployment Account program is
to identify those individuals who may need additional services and
support to successfully find and retain work and give them access
to a Personal Reemployment Account as an additional tool to be used
toward that end.
This program allows eligible individuals direct access only to core
services provided by the One-Stop Career Centers. However, if the
individual determines the need for other One-Stop Career Center services
such as intensive reemployment services (e.g., counseling, case management),
training, or supportive services, he/she must purchase these services
with account funds. Intensive reemployment, training, and supportive
services may be purchased from other sources outside the One-Stop
system, the One-Stop Career Center, or a combination of both.
This account gives the individual flexibility and personal control
by allowing eligible individuals to access providers and services
outside of what is currently available through WIA-funded channels.
11. Why are individuals allowed to go outside the public workforce
investment system for training services?
One of the purposes of the accounts is to give unemployed workers
maximum flexibility.
In certain situations where the time necessary for obtaining employment
is predicted to be substantial, a wider array of services may be appropriate.
Individuals may choose to purchase the intensive reemployment, training
and supportive service offerings from the public system; use the funds
available in their account for specialized services or needs unavailable
or unaddressed through their particular One-Stop Career Center system
or select a combination of services from both components.
12. Describe some of the intensive reemployment, training
and supportive services that can be purchased with the account funds?
The allowable services that can be funded by the account may include
career counseling, occupational skills training, skills upgrading,
child care, transportation, health-related assistance and financial
management counseling. In addition, for UI exhaustees only, an incremental
payment process can be established whereby the funds can be used as
ongoing income support at state option while the individual conducts
a job search. The individual will be able to select from an extensive
menu of allowable services and develop a service strategy that best
meets the career goals identified in the individual's employment plan.
13. Will there be an emphasis on the quality of the jobs and
retention attached to these accounts?
Yes. While individuals will make the choices involved with their account,
they will work closely with professional career counselors available
through the One-Stop Career Center system. Emphasis will be placed,
where appropriate, on preparation for employment in high growth industries
and occupations. In addition, the reemployment bonus, which provides
an account cash-out, has a job retention component: individuals are
paid in two installments, 60% at employment and 40% after six months
of job retention.
14. Can a One-Stop Career Center turn down an individual's
choice of an intensive reemployment training or supportive services
provider or school?
Yes, in certain circumstances. The general intent of the Personal
Reemployment Account is to give eligible account recipients broad
choice and discretion based on the reemployment needs of the individual.
Additionally, career counselors from the One-Stop Career Center will
be available to provide guidance to individuals that need assistance
while making such service and provider selections. However, if a representative
from the One-Stop Career Center determines that the service (intensive
reemployment, training or supportive) or provider selected or purchased
is wholly unreasonable or egregious, the selection or approval of
the expenditure can be denied.
15. Has the Department of Labor made Personal Reemployment
Accounts available to workers in the past? If yes, what were the results?
No. The Department has not made Personal Reemployment Accounts available
to workers in the past. However, there were two Department of Labor
studies of the Reemployment Bonus Experiments conducted in the states
of Washington and Pennsylvania. Findings from the two studies showed
that in today's dollars, a reemployment bonus of as little as $250-$750
motivated people to become reemployed and reduced the duration of
UI by about a week.
16. What services are available to unemployed individuals
who are not eligible for Personal Reemployment Accounts?
The Personal Reemployment Account program is a new and innovative
initiative that is being utilized now in immediate response to the
needs of unemployed job seekers so that more individuals can return
to work more quickly. This new program will provide an extra $3.6
billion in resources to those workers who are identified as having
the most difficult reemployment prospects. This is in addition to
the existing investment of $3.5 billion appropriated through the workforce
investment system to serve adults. As has always been the case with
the public workforce investment system, any individual, whether a
UI claimant or not, is encouraged to access One-Stop Career Center
services in the community and to use the basic core services, such
as job search, access to labor market information and career and financial
aid counseling that will assist the person in becoming reemployed
or in developing his/her career. In addition, if the individual is
determined to require more advanced assistance in order to obtain
a job, intensive reemployment services, training and supportive services
may be accessed. Such services can include in-depth career counseling,
out-of-area job search assistance, case management, occupational skills
training, child care and transportation. Also, beyond the realm of
employment and training services, One-Stop Career Centers can provide
individuals with access to an array of other community resources and
services.
17. How are the Personal Reemployment Accounts going to be
funded?
States will be given a national total of $3.6 billion to provide Personal
Reemployment Accounts. Each state receives an allocation based on
total unemployment levels.
18. Does the Personal Reemployment Account Program replace
the Temporary Extended Unemployment Compensation program (TEUC)?
No. On January 8, 2003, the President signed a bill to extend the
TEUC program through May 2003. The Personal Reemployment Account program
is proposed in addition to the extension of TEUC.
19. When will the Personal Reemployment Account program start
and when will the funds be available?
It is anticipated that funds will be available and the program will
start early in 2003.
20. Will funding be provided to pay for administrative costs
incurred with the Reemployment Accounts program?
Yes. Funding for the states to administer the Personal Reemployment
Account program will be provided.
21. How long will this program last?
The Personal Reemployment Account program will be authorized for two
years.
22. Can an individual transfer a Personal Reemployment Account
to a family member?
No. Personal Reemployment Accounts are nontransferable. If for some
unforeseen circumstances an account is no longer active, funds will
be recaptured by the state and used for additional Personal Reemployment
Accounts.
23. Are Personal Reemployment Accounts taxable?
Costs for intensive reemployment, training and supportive services
are not. Proceeds from a reemployment bonus are considered income.
24. Will new legislation or regulations be needed?
New legislation is needed.
25. What efforts will be taken to ensure that there is effective
monitoring and evaluation of these accounts?
There will be many safeguards in place to ensure that Personal Reemployment
Accounts are effectively monitored and evaluated. To determine whether
an individual is an Unemployment Insurance exhaustee, cross-matching
with the UI claims database will take place. To determine whether
an exhaustee is unemployed, cross-matching with the state new hire
database will also take place. To ensure that an individual will not
access One-Stop intensive reemployment, training or supportive services
for a year following the Personal Reemployment Account cash-out, Career
Center case managers will, at intake, cross-match the individual's
name with the Center's automated records of service. Fourth, each
recipient of a Personal Reemployment Account will sign a self-attestation
that assures that the individual will not misuse the account funds,
that the bills they submit for payments are for legitimate purposes
according to the criteria of the Personal Reemployment Account, and
that he/she agrees to reimburse all account funds determined to have
been unallowable. In addition, One-Stop Career Center representatives
can deny approval of payment if they determine that the service or
provider selected or purchased is wholly unreasonable or egregious.
This will be coupled with any other civil or criminal penalties deemed
appropriate by the state. Fifth, in the case of UI benefit exhaustees,
face-to-face interviews will be held with account recipients on a
periodic basis to ensure that the individual is actively accessing
the intensive reemployment, training and supportive services necessary
to become successfully employed and retained in a job and that the
account funds are being used in accordance with the requirements of
the program. Finally, states will be required to conduct a yearly
audit of the financial management of the Personal Reemployment Accounts
program, at which time a statistically significant sample of individual
reemployment accounts will be reviewed.
26. Can states use the money for anything other than Personal
Reemployment Accounts?
No. If a state accepts the money, it must use it to establish Personal
Reemployment Accounts.
|
|