DEFINITION of Federal Trade Readjustment Allowance

The Federal Trade Readjustment Allowance is a form of income support payments made to individuals who have exhausted unemployment compensation and whose jobs were directly affected by foreign imports as determined by a certification of group coverage issued by the U.S. Department of Labor.

The Federal Trade Act provides special benefits under the Trade Adjustment Assistance (TAA) program to those who were laid off or had hours reduced because their employer was adversely affected by increased imports. The increased imports need to be a result of trade arrangements permitted under the Trade Act of 1974.

BREAKING DOWN Federal Trade Readjustment Allowance

Sometimes, workers are laid off because their firm is downsized or goes out of business, and through no direct fault of their own (i.e. fired for cause). When this happens, the federal government provides unemployment insurance payments while those affected individuals look for new work. These payments, however, expire after a certain amount of time, even if no new job has been found. However, if the lack of work has been caused directly by the influence of foreign imports, then the government may extend unemployment payments via a Federal Trade Readjustment Allowance.

Federal Trade Readjustment Allowance (TRA) benefits include paid training for a new job, financial help in making a job search in other areas, or relocation to an area where jobs are more plentiful. Those who qualify may be entitled to a weekly TRA after their unemployment compensation is exhausted.

For instance, if steel workers have been laid off and they are unable to find work within the window of standard unemployment insurance (UI) coverage, they may be entitled to a TRA benefit if it is determined that cheap Chinese steel imports have directly resulted in those job losses.

There are three types of TRA: Basic TRA, Additional TRA, and Completion TRA.

 1. Basic TRA is payable if you are enrolled or participating in TAA-approved training, have completed training, or have obtained a waiver of the training requirement. The total amount of Basic TRA available will be calculated by multiplying your UI weekly benefit amount by 52 and subtracting the total sum of UI received. Therefore, if you have already received at least 52 weeks of UI generally you will not be eligible to receive any Basic TRA
You may still receive Basic TRA even if you are not in training, if you obtain a waiver of the training requirement from your State. Waivers may be issued if:

  •                 The worker is unable to participate in or complete training due to a health condition
  •                 No training program is available
  •                 An enrollment date is not immediately available

2. Additional TRA is payable only if you are participating in TAA-approved training and have exhausted all rights to Basic TRA. Additional TRA may be payable for up to an additional 65 weeks after the exhaustion of Basic TRA or after the period for Basic TRA eligibility during which you received UI, but only if you are enrolled in an approved training program.

3. Completion TRA (an additional period of up to 13 weeks of income support) is payable only if you are participating in TAA-approved training and have exhausted all rights to Basic TRA and Additional TRA. Assuming you meet the other TRA eligibility requirements, you may qualify for up to 13 weeks of Completion TRA where all of the following five additional criteria are met:

  •     The requested weeks are necessary for you to complete a training program that leads to completion of a degree or industry-recognized credential; and
  •     You are participating in training in each such week; and
  •     You have substantially met the performance benchmarks established in your approved training plan (you have maintained satisfactory academic standing and are scheduled to complete training within your training plan's specified timeframe); and
  •     You are expected to continue to make progress toward the completion of the approved training; and
  •     You will be able to complete the training during the period authorized for receipt of Completion TRA

To file a TRA claim, an affected person must contact their State Unemployment Insurance agency or One-Stop Employment Service office and ask for information about filing a Petition for Trade Adjustment Assistance. The Petition for Trade Adjustment Assistance must be filed with the U.S. Department of Labor (DOL). If DOL approves and certifies the petition, the affected workers will be entitled to file a claim under the TAA program.

Assistance for workers laid off for other reasons may be provided by the Workforce Investment Act of 1998 (WIA)