Arizona's Unemployment Payouts Will Increase For First Time Since 2004

Published: Tuesday, July 6, 2021 - 3:30pm
Updated: Wednesday, July 7, 2021 - 9:06am
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The maximum payout for unemployment insurance in Arizona is just $240 per week — the second-lowest benefit in the nation. But Arizona lawmakers have agreed to raise the state’s unemployment pay for the first time since 2004. Starting in July 2022, the rate will be $320 per week.

When the changes go into effect, Arizona’s unemployment pay will still be among the nation’s lowest. But Amy Pedotto with the economic policy think tank, Grand Canyon Institute, said an extra $80 per week will make an impact.

“It’s important that people who are going through a tough time, if they lost their job through no fault of their own, they have that extra assistance to keep paying their bills, rather than the chaos that ensues when they can’t make ends meet," Pedotto said.

The update to the state's unemployment program will also increase Arizona's income disregard level. Currently, if out-of-work Arizonans earn anything more than $30 per week, the state deducts that from their unemployment pay. Under the new changes, workers can earn up to $160 before seeing a deduction.

→ 'We Just Need More Help': Arizona's Unemployment Program Provides Less Than Other States

"That's huge," Pedotto said. "During the pandemic so many people had their hours reduced, but if they earned more than $240 a week, they didn't qualify for assistance, which was really brutal for a lot of people."

Pedotto said that change is so significant, Arizona will go from having the nation's lowest income disregard to the 18th-highest.

Changes to the state's unemployment insurance program were finalized at the end of Arizona's legislative session last month. The updates were part of bipartisan efforts by Senate President Karen Fann and Reps. David Cook, Mitzi Epstein and Randall Friese.

Pedotto said the state's current unemployment benefits are so far below other states', they were costing Arizona millions in economic activity. She said the updated system will benefit not just workers, but the state as a whole.

“That impacts landlords, it impacts kids participating in schools, it will impact people being able to transport themselves to and from work, all of those things have a ripple effect throughout the economy,” Pedotto said.

The changes will be funded by expanding the taxable wage base upon which employers are assessed. Grand Canyon Institute estimates 70,000 Arizonans will benefit from the changes in the first year after they go into effect.