Governor Kathy Hochul announces the pay off of the federal Unemployment Insurance Trust Fund Loan (June 30, 2025)
Governor Kathy Hochul has announced that New York State has paid off the nearly $7 billion federal Unemployment Insurance (UI) Trust Fund loan.
Hochul said this move will bring the fund to solvency, increase benefits for unemployed New Yorkers and cut costs to businesses. The pay off is part of the 2026 State Budget.
Before the COVID-19 pandemic, the UI Trust Fund had a positive balance of nearly $2.5 billion. However, due to the economic downturn caused by the pandemic, the balance was paid out to New Yorkers, requiring the State to borrow from the federal government to continue paying eligible claims. Paying off the debt and making the fund solvent allows the state to increase the maximum UI benefit rate so that it better aligns with other states and changes the taxable wage base to help build up reserves and stabilize the UI Trust Fund for the future. The maximum weekly benefit to unemployed workers, which has been frozen because of the debt, will increase from $504 to $869 in October.
Business owners will benefit too since their contribution rates had continued to climb while the debt was paid down. Employers are projected to save an average of $100 per employee in 2026 and $250 in 2027. Additionally, the taxable wage base will increase in 2026, strengthening the trust fund over time and helping to maintain affordable tax rates for New York’s employers in the long term.
For more information on the Unemployment Insurance Trust Fund, visit the New York State Department of Labor’s webpage.
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