By his own anxious estimation, 53-year-old unemployed sheetmetal worker Manuel Freitas is just weeks away from being homeless.

It's been five weeks since Freitas last worked and, thanks to a complication with his claim status, he's received just one unemployment compensation check since.

For Freitas and a rising number of others set adrift by the roiling economy, the state's unemployment fund represents the difference between meager survival and bleak dissolution. And, despite record demands for its coverage and protection, the fund is proving to be a rare source of stability in a most unstable economic time.

Freitas, a Kaimuki resident, was one of about two dozen people seeking face-to-face help at the state's Honolulu Claims Office on Punchbowl on Thursday. Like others there, he had tried to resolve his problem over the phone but was unable to make it through a system overburdened with thousands of new filers each month.

The drive to the office was something of a luxury for Freitas, who tries to save money by driving as little as possible. In fact, Freitas was already cutting back when he worked his last job in February. He doesn't eat out. He canceled his cable service.

"I couldn't pay my rent last month, so I paid half and then paid a $25 penalty when I paid the other half later," he said. "This month, I'm late again. It's just really stressful. I just hope something happens with our economy soon so we can have at least a little bit of normalcy."

Until that happens, Freitas is holding his breath and hoping that the unemployment checks resume before his financial situation becomes unmanageable.

In the first week of March, the state Department of Labor and Industrial Relations received 2,563 new initial unemployment filings, an increase of 107 percent over the same period last year.

Just over a year ago, the unemployment fund was so flush with reserves that the state Legislature lowered employer contributions and increased maximum benefit payments to recipients.

One dramatic economic downturn later, the fund is paying out what are believed to be record high benefits to address the highest local unemployment rate in 30 years.

Yet, while the fund dropped from $552 million at the end of 2007 to $431 million at the end of January, the Department of Labor said payments to eligible filers are assured through 2009 and beyond thanks to existing safeguards and an influx of federal funds.

"The fund will never not fund its balances," said department spokesman Ryan Markham. "Even if that ($431 million) somehow went out the door, there are ways to continue paying benefits."

BUILT-IN SAFEGUARDS

In the event of an emergency, federal loans, provided interest-free for the first year, are available to ensure uninterrupted benefit payments.

The fund also has built-in safeguards to ensure that it is able to meet payout demands. If the fund dips beneath its "adequate reserve," a rolling figure determined by previous years' payouts, the taxable base may be adjusted.

Markham said federal funding also helps to provide a financial buffer for the fund.

"Our payouts are probably at an all-time high, but the help is there with the influx of federal funds," he said.

Under the Assistance for Unemployed Workers and Struggling Families Act of the American Recovery and Reinvestment Act, signed by President Obama on Feb. 17, DLIR will likely qualify for $30 million in federal funds to be used for unemployment compensation.

Two years ago, when Hawai'i still boasted one of the lowest unemployment rates in the country, concerns were raised that the unemployment insurance fund had reached excessive levels, at the expense of local businesses.

In response, the Legislature passed Act 110, which lowered the taxable wage base used to calculate what employers pay for unemployment insurance from the first $35,000 of an employee's gross pay to $13,000 and increased maximum weekly unemployment benefits for employees from 70 percent to 75 percent of the worker's average weekly wage.

At the time, the law was expected to save employers $151 million.

In May 2007, DLIR estimated that the fund would stand at more than $400 million in 2010 "barring any severe and unexpected economic downturn."

'STILL IN GOOD SHAPE'

The qualification proved to be prescient.

Last month, Hawai'i's unemployment rate hit 6.5 percent, its highest in more than 30 years.

"The state was so diligent in maintaining the fund, and the fund was so huge, that even though Act 110 correlated with an economic downturn, we're still in good shape," Markham said. "We were lucky that we had those reserves."

Margaret Sellers, 24, of Punchbowl will rely on those reserves until her ongoing search for a full-time job proves fruitful.

Sellers lost her job as a server when E&O Trading Co. closed more than a month ago. She has managed to stay afloat with a part-time job at Level 4 and a rainy-day fund that is quickly depleting.

"Saved money doesn't last forever," she said. "Something has to happen now."

Sellers, who has a degree in English from the University of Hawai'i and plans to pursue a master's degree in education in the fall, has been applying for jobs since E&O closed, but with no luck.

"I've been looking, but they always tell me the same thing — that I'm very qualified but there are 200 other applicants," she said.