House passes updates to unemployment insurance and a plan to address benefits cliff

Following up on progress made in the last legislative session to address critical workforce and economic issues, the Kentucky House of Representatives sent a key bill and a resolution to the State Senate this afternoon.

House Bill 146, sponsored by Rep. Russell Webber, is a cleanup to 2022’s House Bill 4 which made major reforms to the state’s unemployment insurance system. On the House floor, Webber said the new legislation contains several points of clarification and some revisions based on feedback from the U.S. Department of Labor to help ensure the new law fully conforms with federal UI law. He stated that the bill preserves the original intent of House Bill 4, which was to support rapid reemployment and ensure the sustainability of the state’s unemployment insurance trust fund. House Bill 4 was a top Chamber priority in the 2022 session.

Small changes in the bill include technical modifications to statute and points of clarification as well as changing the maximum duration of weeks from 12 weeks to 16 weeks during periods of low unemployment.

The bill passed the House 98-2.

House Joint Resolution (HJR) 39, sponsored by Rep. Johnathan Dixon, is the result of recommendations from a task force created in 2022’s House Bill 708 seeking to offer more resources to support working families by studying Kentucky’s benefits cliff. This is a problem that occurs when an individual suddenly loses eligibility for public assistance due to a wage increase or because they started working more hours.

This resolution charges the Kentucky Cabinet for Health and Family Services (CHFS) with conducting a review of the state’s public assistance programs, analyzing the costs of recent changes to the state’s child care subsidy program, examining Kentucky’s use of federal relief dollars, and implementing an outreach and education campaign to raise awareness of the federal Earned Income Tax Credit (EITC) and free tax filing services. The EITC is a federal tax credit program that supports and rewards workforce participation and can help public assistance recipients overcome benefits cliffs. Roughly 20 percent of eligible Kentuckians fail to claim the EITC every year, largely due to not filing a federal income tax return. This new outreach program can help connect more public benefit recipients with the EITC to encourage upward economic mobility.

Additionally, CHFS is charged with making available a user-friendly benefits cliff calculator available to Kentuckians applying or reapplying for public assistance benefits so that they and their case managers can fully explore issues that could arise related to earnings increases and benefit eligibility.

The resolution’s provisions related to the benefits cliff calculator and the EITC outreach program were both recommendations voiced by the Chamber during the course of the Benefits Cliff Task Force that met during the 2022 interim.

HJR 39 passed the House 100-0.

Both pieces of legislation now move to the Senate to be heard in committee and then on the floor.

Stay tuned to The Bottom Line for more updates.