New law will cut off unemployment pay for GI Bill users

Department of Labor officials are moving to cut off unemployment checks for veterans attending college on the GI Bill after lawmakers quietly approved the cost-cutting move last December.

But exactly when and how the change will take place remains a frustrating mystery to federal and state officials and to veterans advocates who unsuccessfully argued against the idea.

Language inserted in the final draft of last year’s National Defense Authorization Act specifies that veterans receiving Post-9/11 GI Bill education payouts should not also be eligible for unemployment insurance. An exception was carved out for veterans involuntarily separated from the military under honorable conditions.

The Post-9/11 GI Bill pays not only tuition for student veterans but also a living stipend, equal to the Basic Allowance for Housing regional payouts for an E-5 with dependents. That ranges from around $1,100 in areas around Ohio State University to more than $4,000 a month for individuals living near San Francisco State University.

That, coupled with 26 weeks or more of unemployment benefits, can lead to a substantial sum of government payouts headed to a veteran each month.

Federal officials aren’t sure how many veterans may be taking advantage of the dual benefits now, but anecdotal evidence was enough for lawmakers to move to end the practice.

But doing so will be complicated.

In a statement, Employment and Training Administration officials within the Department of Labor said they are working with various state and federal agencies to “develop an approach” for how to identify which veterans are receiving unemployment checks, GI Bill checks or both.

No such central information system exists, in part because unemployment benefits are handled differently in each state. The language passed by Congress last year did not include any funding for new databases or instructions on how to handle that information sharing.
“That has proved to be more challenging” than expected, Labor officials acknowledged. “ETA will be issuing guidance on that as well once issues are resolved.”

It’s also unclear who will be blocked from receiving the unemployment payouts once the new rules and processes are developed. The NDAA language appears to cover individuals who collect unemployment after leaving the military but not those who work somewhere else between leaving uniform and using their GI Bill benefits.

Labor officials said they believe the new rules “will only apply to a small segment of transitioning military who get Post-9/11 GI Bill benefits” but could not offer more specifics as their process continues.
Confusion over the parameters and process led veterans advocates to argue against the provision last fall, and the language was successfully dropped in the House version of the annual authorization act. But Senate lawmakers included it in subsequent versions, and the final draft signed by the president included the new prohibition.

The new law did not specify any timeline for enforcing the unemployment check changes. States are not required to enforce it until the new guidance from the Labor Department is released.