Governor Kathy Hochul celebrated with business and union leaders the state’s action to pay off the nearly $7 billion federal Unemployment Insurance Trust Fund loan.
Governor Kathy Hochul celebrated with business and union leaders the state’s action to pay off the nearly $7 billion federal Unemployment Insurance (UI) Trust Fund loan.
The move brings the fund to solvency, increase benefits for unemployed New Yorkers and cut costs to businesses. Hochul announced this action back in May as part of the 2026 State Budget.
Hochul said, “As federal tariffs continue to drive up the cost of doing business, paying off the Unemployment Insurance Trust Fund loan will give workers and businesses a sense of relief and put real money back into the pockets of employers and workers alike.”
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 unemployed state residents, 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 for unemployed state residents so that it better aligns with other states. The maximum weekly benefit to unemployed workers, which has been frozen because of the debt, will increase from $504 to $869 in October.
By paying off the debt, the State is also putting money back in the pockets of business owners, whose 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 per employee 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.
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