Wealth Blog

Finance Blogs » Wealth Blog » Millionaires on unemployment

Millionaires on unemployment

By Judy Martel · Bankrate.com
Monday, October 8, 2012
Posted: 6 am ET

Working Americans pay for unemployment insurance, so should there be an income cap on who can claim it? The Congressional Research Service reported that 2,362 households with an annual income of $1 million or more received unemployment assistance in 2009, causing some lawmakers to erupt in outrage.

Sen. Tom Coburn, R-Okla., wrote to Bloomberg: "Sending millionaires unemployment checks is a case study in out-of-control spending. Providing welfare to the wealthy undermines the program for those who need it most while burdening future generations with senseless debt."

The report says the millionaire households receiving unemployment represent 0.02 percent to 0.03 percent of all taxpayers who report receiving it. In addition to the millionaire households, more than 120,000 households with incomes between $200,000 and $500,000 claimed unemployment in 2009 and more than 825,000 households earning between $100,000 and $200,000 claimed it.

At issue for Congress is the extension of unemployment benefits "at a time when the federal government and the states face serious budget constraints," according to the report. In the second quarter of this year, more than 4.6 million people filed initial unemployment claims and 1.1 million people saw their benefits run out.

In February 2009, Congress expanded the time period states could pay unemployment benefits, from 26 weeks to a maximum of 99 weeks. In the fiscal year that just ended Sept. 30, the federal deficit is projected to be $1.1 trillion, leaving lawmakers scrambling for reductions. One idea is to restrict or eliminate unemployment benefits to high-income earners.

Do you agree with some members of Congress that one way to reduce the deficit is to eliminate unemployment benefits for high-income earners? And at what income level would you draw the line?

Keep up with your wealth and mortgages and follow me on Twitter.

Get more news, money-saving tips and expert advice by signing up for a free Bankrate newsletter.

Bankrate wants to hear from you and encourages comments. We ask that you stay on topic, respect other people's opinions, and avoid profanity, offensive statements, and illegal content. Please keep in mind that we reserve the right to (but are not obligated to) edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused.

By submitting a post, you agree to be bound by Bankrate's terms of use. Please refer to Bankrate's privacy policy for more information regarding Bankrate's privacy practices.
October 09, 2012 at 2:13 pm

Since Obama decided to start class warfare in this country, the absurdity surfaces and usually with convenient articulation. In other words tell enough of the story to rile people up identifying with other convenient articulation they've heard. The truth just can't compare with the cacaphony word play that turns a negative into a seemingly positive or vice versa. If we want a caste system in America, start changing the rules currently written or ............. fix the measureably broken issues causing the lion's share of the problems; misuse and unaccountability.

October 09, 2012 at 2:07 pm

If you pay into the system, your should get the benefit. However, if anyone wants to opt-out, they should be able to do so and not get the benefit if they become unemployed. Additionally, the employer should not have to contribute for anyone "opting-out".

October 09, 2012 at 2:05 pm

A million a year or $50,000 a year, why are these questions always us against us, of course they are eligible for benefits? The talking heads are always talking about "big" government, so why don't we talk about big government, no letter carriers or FBI agents but. Political pay scales, benefit packages, pensions and what's left to the survivor. Union pensions cut healthcare at age 65 and pensions to the surviving spouse by 50%. Let's make these public servants ( politicians ) pay and benefit packages easily accessible public knowledge. Every tax payer should know how much you are paying your representative.

October 09, 2012 at 2:00 pm

Should there be an income cap on people who can claim healthcare expenses? Why not? the rich can afford it.

October 09, 2012 at 1:52 pm

Marlena - I'm not saying it should be eliminated either.

The common opinion is that if the wealthy pay into the system, they should be able to receive benefits. The point is - workers don't pay into the system, their employers do. I believe that makes the case that the pool of money can be reasonably allocated according to need.

October 09, 2012 at 1:42 pm

The premium is paid so the means of the collector should not matter. If there is a cap, the employer should not have to pay the premium for employees over the cap.

October 09, 2012 at 1:37 pm

I would think there should be a cap on unemployment benefits. It makes no sense to me that people in this tax bracket would need the dollars.

October 09, 2012 at 1:33 pm

Smitty - I'm not saying it should be eliminated but if were many employers would hire more people and less people would be on unemployment.

October 09, 2012 at 1:25 pm

Are you Kidding,,,ABSOUTELY NOT

October 09, 2012 at 1:24 pm

To Judy Martel

'Thanks' for perpetuating the misconception that the American worker pay their own to unemployment insurance. Most people believe they do, and the majority of the comments here prove it.

Some may argue that they pay it indirectly, but how many of these posters are confident that their employers would give the UE insurance premiums to the employees, if the unemployment system was magically eliminated?