With the expiry of federal enhanced unemployment benefit programs like PUA, PEUC, $300 FPUC and $100 MEUC after September 6th 2021 in all states, there has been considerable chatter around what happens next.
The cessation of unemployment benefits without another extension to the end of 2021, is obviously a big concern for the 8 million+ jobless or under-employed claimants impacted by the impending pandemic unemployment cliff that will result in them losing all current and future benefits under the PUA, PEUC or supplementary $300 FPUC programs. You can see the latest on benefit extensions in the sections below.
Once the federal pandemic programs end jobless claimants will only have access to traditional state unemployment. But this will leave many (mainly PUA claimants) in the lurch since they wouldn’t qualify for traditional state unemployment under current rules. And even if they do qualify, in many states the maximum amount of state unemployment benefits is barely enough to live on.
States Not Extending Enhanced Benefits
Per the latest update no state unemployment agency has extended enhanced unemployment benefits, despite already approved stimulus funds being available for states to use and President Biden calling for the states to do so.
The main reason apparently is the overly high cost of running these enhanced UI programs (PUA, PEUC etc), which was originally paid for using federal funding allocated to administer these programs. The cost of running and administering these programs was apparently running into the hundreds of millions of dollars in large states.
Further extending benefits to a relatively small percentage of the population would be politically hard to justify given the falling unemployment rate and persistent issues business are facing with filling open vacancies.
I’ll continue to post updates as more information comes to hand and you can stay connected via the options below.
No Biden Executive Order. States Have Funding to Expand Unemployment Benefits
The Biden Administration has confirmed that they won’t push to extend federally funded unemployment benefits past the September 6th expiration date via Executive Order or Congressional action. Instead they are encouraging states with high unemployment to use some of the existing $350 billion in ARPA stimulus allocated for State and Local Fiscal Recovery (SLFR) initiatives to fund enhanced unemployment benefits.
As discussed in this video, there is wide latitude for usage of these funds by state governors and departments, which includes funding emergency unemployment benefits. States who ended participation early in federal unemployment programs could also use these funds to extend/expand benefits if they choose to do so.
Some claimants may be eligible for State Extended Benefits (SEB), but after September 4th all claimants must have a regular UI claim to continue receiving benefits. See more in these state specific unemployment pages.
Biden Emergency Extension to Pandemic Unemployment Benefits?
With the rapid spread of and potential economic slowdown from the virulent Delta COVID-19 strain there is now talk of the Biden administration repurposing some of existing ARPA stimulus bill funding to extend pandemic unemployment programs to the end of 2022.
This is similar to the six week LWA extension that President Trump passed by executive order last year (using existing FEMA funding) when Congress could not initially agree on funding an extension to pandemic unemployment benefits.
If Congress cannot provide additional funding then this will be the most likely path for a short-term “emergency” extension of pandemic benefits and could be done relatively quickly along party lines, or simply by a Presidential Executive order. White House lawyers are likely already working on this as a possible option.
Note that states which had ceased participation early in the federally funded unemployment programs will need to reapply to get access to this short term extension, if indeed it is passed.
To Extend or Not?
The argument for extending benefits is that while the economy has improved and COVID vaccination levels keep rising (despite the surging Delta Coronavirus strain), many unemployed are still having a hard time finding a job and millions have gone into the “long term” unemployed category which means they won’t qualify for regular state unemployment – even if they enter a new benefit year. Further constraints with schooling and affordable childcare in addition to the risk of getting more virulent strains of COVID is keeping many front line/customer facing workers from returning to work.
However many business are also providing a counterview and saying they cannot fill open vacancies, particularly in the retail and hospitality industries which have lower income jobs. Because of the overly generous federal benefits, and especially the $300 extra weekly payment, many workers have no incentive to get back to work. As a result of this pressure, many state governors have moved ahead with ending their states participation early in one or more of the enhanced unemployment programs. In some cases more than 10 weeks ahead of the September end date!
Which States Ended Unemployment Benefits Early?
Following recent job reports that showed a shortage of workers to fill open positions, many Republican led states have now ended federally funded pandemic unemployment programs in order to incentivize workers to return to work. You can see the table below for when states ended one or more of the pandemic unemployment programs early.
The argument is that these generous UI benefits deter lower income workers (who make less than $15 p/hour) from returning to work. Opponents argue that the reason people are not going back to work is due to fears around getting COVID (especially with the surging Delta virus) and/or child care and schooling restrictions.
You can see more on states that ended the PUA, PEUC and $300 FPUC programs here and a YouTube video I made on this topic. Note that in several states, local claimant/advocacy groups are filing lawsuits against Governors and UI departments to overturn or suspend the early termination of benefits (and some have gotten injunctions).
|States Ending Unemployment Early||Programs Ending||Termination Date|
|Alabama||$300 FPUC, PUA, PEUC, MEUC||June 19th, 2021|
|Alaska||$300 FPUC||June 12th, 2021|
|Arizona||$300 FPUC||July 10th, 2021|
|Arkansas||$300 FPUC, PUA, PEUC, MEUC||June 26th, 2021|
|Florida||$300 FPUC||June 26th, 2021|
|Georgia||$300 FPUC, PUA, PEUC, MEUC||June 26th, 2021|
|Idaho||$300 FPUC, PUA, PEUC, MEUC||June 19th, 2021|
|Indiana||$300 FPUC, PUA, PEUC, MEUC||June 19th, 2021* (Legal Challenge)|
|Iowa||$300 FPUC, PUA, PEUC, MEUC||June 12th, 2021|
|Louisiana||$300 FPUC, PUA, PEUC, MEUC||July 31st, 2021|
|Maryland||$300 FPUC, PUA, PEUC, MEUC||July 3rd, 2021* (Legal Challenge; Still paying)|
|Mississippi||$300 FPUC, PUA, PEUC, MEUC||June 12th, 2021|
|Missouri||$300 FPUC, PUA, PEUC, MEUC||June 12th, 2021|
|Montana||$300 FPUC, PUA, PEUC, MEUC||June 26th, 2021|
|Nebraska||$300 FPUC, PUA, PEUC, MEUC||June 19th, 2021|
|New Hampshire||$300 FPUC, PUA, PEUC, MEUC||June 19th, 2021|
|North Dakota||$300 FPUC, PUA, PEUC, MEUC||June 19th, 2021|
|Ohio||$300 FPUC||June 26th, 2021|
|Oklahoma||$300 FPUC, PUA, PEUC, MEUC||June 26th, 2021|
|South Carolina||$300 FPUC, PUA, PEUC, MEUC||June 30th, 2021|
|South Dakota||$300 FPUC, PUA, PEUC, MEUC||June 26th, 2021|
|Tennessee||$300 FPUC, PUA, PEUC, MEUC||July 3rd, 2021|
|Texas||$300 FPUC, PUA, PEUC, MEUC||June 26th, 2021|
|Utah||$300 FPUC, PUA, PEUC, MEUC||June 26th, 2021|
|West Virginia||$300 FPUC, PUA, PEUC, MEUC||June 19th, 2021|
|Wyoming||$300 FPUC, PUA, PEUC, MEUC||June 19th, 2021|
Biden Stimulus Package Unemployment Extensions
Congress and President Biden have now passed into law the $2 trillion stimulus package, also known as the American Rescue Plan (ARP). It includes further unemployment program extensions until September 6th, 2021 for the PUA, PEUC and FPUC programs originally funded under the CARES act in 2020 and then extended via the CAA COVID Relief Bill. The need for another unemployment stimulus was reinforced by the prevailing high unemployment situation in many parts of the country due to the ongoing COVID related economic fallout.
Unemployment Benefit Extensions Per DOL Guidelines
The initial Biden stimulus package passed in the House included a $400 FPUC extra weekly payment but in order to get all Democrats in the Senate onboard it had to be cut back to $300 p/week. This amount is the same as the $300 weekly supplement approved under the CAA COVID relief bill (discussed in earlier updates below) was funded until March 14th, 2021 but will now be extended through to week ending September 4th, 2021. This provides another 25 weekly payments for a maximum of $7,500.
The $300 weekly FPUC payment lines up with the September extension of the PUA and PEUC programs. Claimants should be able to rollover remaining weeks from the CAA funded extensions (11 weeks) to the extended Pandemic Unemployment Assistance (PUA) and Pandemic Emergency Unemployment Compensation (PEUC) programs. You can see a graphical representation of the past, current and proposed enhanced unemployment program extensions in the diagram below. See a full review of DOL guidelines this article.
See the following articles for more information on these enhanced unemployment extensions and payment status
- $300 FPUC weekly UI payment update. This covers when these payments will be paid, retroactive payments and coverage periods.
- Pandemic Unemployment Assistance (PUA) extension details
- An extra 25 weeks for regular state unemployment claimants under the PEUC program
- Will The New Unemployment Stimulus Be Retroactive
- When will these extra payments be made and do I need to take any action to get extended weeks?
- A New $100 Benefit on Top of $300 FPUC Weekly Unemployment boost For Mixed Income Earners
So how many weeks is the actual extension under the ARP bill? 29 weeks or 25 weeks?
While the ARP stated that both the PUA and PEUC programs were extended by 29 weeks, the actual number of weeks between week ending March 20th and September 4th is only 25 weeks. This was noted in the DOL guidelines (page 6) around the ARP extension and as such claimants will not be able to exhaust their full entitlements, unless the UI programs are extended (see more in this article)
I had also noted earlier that there could have been a phase-out period for active claimants to use remaining weeks like the CAA 11-week extension; however final DOL guidelines removed phase-out provisions and all program benefits expire on weeks that end before September 6th, 2021. This would be September 4th, 2021 in most states, or September 5th, 2021 for those that a benefits week ending on a Sunday.
Unemployment Tax Break
Another valuable provision in the ARP bill for unemployed workers is to make the first $10,200 in unemployment payments non-taxable to prevent the surprise tax bills many jobless Americans faced in 2020 when filing their tax return. The provision will only be applicable to households with incomes under $150,000 and is only available for 2020 unemployment benefit payments. See how this could impact you if you already filed a return.
I will be monitoring updates and progress as the new UI provisions are implemented by state UI agencies. The DOL is expecting it will take many states until April to implement the extended weeks of coverage, so expect some delays. You can subscribe via the options below to get the latest updates and related articles.
2021 Enhanced Unemployment Extensions Under COVID Relief Stimulus Bill
Common sense has prevailed and President Trump has now signed the $900 billion COVID relief stimulus bill into law, despite his reservations and following widespread condemnation against his last minute complaints. This now releases, among many other items, funding for the enhanced unemployment benefit programs (details below) and stimulus checks to millions of Americans.
For those receiving UI benefits under the PUA and PEUC programs you should continue certifying weekly as payments will be made retroactively once the final bill is approved. While you won’t receive payments, you want to ensure you don’t face delays when back payments start. For those who have exhausted their benefits, they will have to unfortunately have to wait until the final bill is passed before next steps are known.
State Specific Unemployment Resource and News Pages
|Florida (FL)||California (CA)||Texas (TX)|
|New Jersey (NJ)||Massachusetts (MA)||New York (NY)|
|Arizona (AZ)||Pennsylvania (PA)||Colorado (CO)|
|Ohio (OH)||Georgia (GA)||Illinois (IL)|
|Wisconsin (WI)||Michigan (MI)||North Carolina (NC)|
|Virginia (VA)||Maryland (MD)||Minnesota (MN)|
[Dec 25th update] President Trump sent a lump of coal to jobless and underemployed Americans for Christmas by refusing to pass the COVID stimulus bill that had passed in Congress after lengthy negotiations, which contained the unemployment program extensions and funding for a second round of stimulus payments (see earlier update below). This means that Congress will have to now go back in session to pass the bill again with a presidential approval override.
Bottom line as discussed in this UI stimulus update video is that there will be a delay in payments and a likely lapse in benefits as the PUA and PEUC programs expired on December 26th. New payments under the $300 FPUC and $600 stimulus will now only start (assuming the COVID relief bill does pass) in 2021 with people having to rely on retroactive back payments for their benefits.
[Approved Stimulus Package] Congressional leaders have passed a circa $900 billion stimulus plan that includes funding for an approximately 11 week extension (to March 14th 2021) to federal pandemic programs (PUA, PEUC) and additional supplementary unemployment benefits at $300 FPUC per week for millions of unemployed or underemployed Americans who lost their job or income due to COVID.
Per the legislative text, the extension funding will only cover the period after December 26th 2020 and run for approximately 11 weeks, until March 14, 2021. Like the original $600 FPUC program (in effect till July 31st 2020) the new $300 FPUC payment only has a $1 minimum threshold, which is different to the $100 for the LWA program. PUA and PEUC programs have been extended and will provide an additional 11 weeks of retroactive coverage.
You can see the latest around this and FAQs around how this will be paid in this regularly updated $300 UI payment article or via this video. This covers when these payments will be paid, retroactive payments and coverage periods.
[December 2020 update] Congress is back in session after a tough election cycle and there is still a wide chasm between Republicans and Democrats when it comes to agreeing on a new Coronavirus / COVID stimulus package, which would include enhanced unemployment benefit extensions to programs that expand UI coverage (PUA and PEUC) and provide additional supplementary payments like the $300 LWA and $600 FPUC programs.
Without additional extensions to the PUA and PEUC program funding and end dates, unemployed workers who have weeks left to claim (i.e. a pending balance) after December 31st would not receive any additional benefits under this program. This could impact nearly 5 million unemployed Americans. Further the supplementary benefit payments, above and beyond the regular or enhanced state benefits, have been critical to those living in high cost states where the standard UI benefit has not provided sufficient income to live on. Overall more than 20 million jobless Americans have come to rely on the enhanced COVID unemployment benefits to make ends meet while they wait for their employment situation to improve.
$908 Billion Interim Stimulus Package and UI Benefits Extension
There is however some hope that the current Congress can at least pass a bridging or interim stimulus package as part of the annual government funding bill, which would provide temporary relief until the new Congress and President are sworn in next month and pass a larger stimulus package. A group of bipartisan lawmakers unveiled an approximately $908 billion COVID relief plan that includes $180 billion of federal funding for pandemic unemployment programs and $300 in UI supplementary benefits. There is also an alternative $916 billion stimulus bill proposed by Trump and Senate Republican leaders which has no supplementary unemployment benefits, but rather a $1200 stimulus bill. Naturally unemployed Americans would prefer the $908 billion stimulus package. There is still nothing in a formal bill but this is the most progress made on a real extension in a while. You can see more in the following YouTube video I recently published on this interim stimulus bill.
Are unemployment benefits in the stimulus retroactive
Yes, it is expected that unemployment benefits – both supplementary and extended – would be retroactive to the start of the program or latest extension, so many eligible recipients should get a pretty significant unemployment check payment if they face delays but are eventually approved for past weeks.
Will I have a lapse or delay in getting my benefits if a bill does pass this year?
Some are arguing that the ongoing delays in Congress passing a new stimulus bill that includes UI benefits extensions may mean a lapse or extended delay in 2021 payments even if a bill is passed in the next week or two. Based on the challenging rollout of other Pandemic unemployment programs (LWA, FPUC) this year, worker advocates say it could take weeks for the antiquated state unemployment systems and programs to get updated and process claims/payments for new benefits.
[Post Election update] With Democratic candidate Joe Biden winning the Presidential election and Senate Republicans likely to retain control of the Senate (pending final certification and Georgia run-offs), the probability of a stimulus package containing supplementary unemployment benefits happening this year is very remote as Trump and the Democrats have no political incentive to compromise. This means current and retroactive payments under the CARES act enhanced unemployment programs (PUA, PEUC and FPUC) will expire at the end of the year. Further, it is also highly likely that the next stimulus package will be much smaller and more focused. This means any supplementary unemployment benefits will be in the $300 to $400 range (similar to the LWA program) and for a short period (2 to 3 months). More details will come soon and I will post updates as that happens.
[Pre-election update] Unfortunately hope for another stimulus package, that would have included additional unemployment benefits, is quickly dimming as the Senate (led by Republican Mitch McConnell) has now recessed until after the election following the confirmation of Supreme court justice Amy Coney Barrett. This means that it is highly unlikely the Senate will reconvene to vote on a new stimulus bill, even if the White House and House Democrats agree on a stimulus package. This is devastating news for the millions of unemployed Americans impacted by COVID related job losses. The main hope is that after the election, a new stimulus bill is quickly passed that makes included unemployment benefits retroactively payable.
[October 2020 update on latest negotiations] With a month to go before the federal election, House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin are working hard to compromise on a new pre-election stimulus deal that will include additional unemployment benefits and another stimulus check. Per their recently passed bill in the house, Democrats are still pushing for a $600 p/week supplementary UI payment (similar to the FPUC payment which expired in July), but will likely have to settle for a maximum $400 weekly payment in line with the recently paid Lost Wages Assistance (LWA) payment and the White House proposed $1.8 trillion stimulus bill.
However Senate leader, Mitch McConnell has said it is unlikely that the Republican controlled Senate would have the votes to pass such a large stimulus bill and he is instead proposing on passing a smaller $500 billion stimulus bill, with more focus on small business’ via extending the PPP program and only $300 in additional weekly unemployment benefits. This is not something the Democrats or the White House are likely to support. Either way, with only a few days to go before the presidential election if another stimulus bill does not get agreed to this week then it could be a real possibility that no additional unemployment benefits will be available in 2020. This will be a devastating blow to millions of Americans and have a pretty significant impact on the US economy due to the contraction in consumer spending over the holiday season.
In addition to funding extra unemployment benefits, a key part of any stimulus package, there is also bipartisan consensus on sending another $1,200 direct payment (stimulus check) before the end of the year. There would also be help for struggling small business through additional funding for the Paycheck Protection Program (PPP) and for airline industry employee furlough prevention. Support for states, local governments, home owners and renters will also likely be part of any new stimulus package.
See details on when the renewed unemployment stimulus could be paid if passed in the next few weeks. Payments will be retroactive to September 12th, the week after LWA benefits expired.
[August 2020 Update] With Congress unable to reach an agreement on a new stimulus bill and no impending legal challenges it looks like Trumps executive order (detailed below) to replace the extra weekly unemployment benefit (FPUC, or $600 weekly payment) will actually be implemented following FEMA guidance on the Lost Wages Assistance (LWA) Program. The following are key guidelines:
The LWA program will provide eligible claimants in state administered unemployment Insurance (UI) programs up to $400 per week additional UI benefits, starting with weeks of unemployment ending on or after Aug. 1, 2020, and ending Dec. 27, 2020 at the latest. This means that payments will be retroactive to August 1st, even though the program will be implemented after that. See which states have started implementing the LWA program and when unemployment benefits will start to be paid.
As per recent federal enhanced unemployment benefit programs, for individuals to quality for LWA benefits they must certify that they are unemployed or under unemployed due to coronavirus (COVID-19) related reasons, and the state must confirm that the individual is receiving at least $100 of existing unemployment benefits (e.g. under state UI, UCFE, PUA, EB or PEUC programs) This is to prevent fraud from people who were claiming this payment with minimal UI benefits.
LWA a joint federal-state agreement where the federal government is covering 75% or $300 of the extended unemployment benefit (via $44 billion in FEMA Disaster Relief Fund funds). States own contributing the remaining 25% ($100) of the benefit payment using state budgets or the emergency funding received under the CARES Act.
However the state contribution is not mandatory and is at the discretion of the state’s governor. Further states can count existing unemployment benefits paid to claimants against their $100 obligation under the LWA program. This could result in unemployed workers across many states facing significant budget shortfalls only getting the baseline federal payment of $300 in additional benefits.
The LWA is a different program to the FPUC program and some states may require claimants to reapply for these benefits.
Because Trump’s executive order cannot allocate new federal funding, the LWA program may end earlier than Dec. 27 (highly likely) if FEMA expends $44 billion prior or the balance of the Disaster Relief Fund decreases to $25 billion. Congress would then have to approve additional funding.
For additional unemployment resources and state based information see the UI resource page.
Source: DOL (LWA program)
[Updated with further WH clarifications] President Trump has signed a series of executive orders, one of which includes extending the weekly unemployment benefits payment (FPUC) to the end of the year. However as expected and per the earlier update below, he is lowering the FPUC amount to a maximum of $400 p/week. The is made up of $300 in federal funding and $100 of state funding. In recent clarifications from the white house confirmed that the state component of the FPUC unemployment funding (25%, or $100) was optional. So this essentially means $300 is the base amount that many jobless Americans could be getting in several states, who are already seeing budget shortfalls from the pandemic induced slowdown.
When will the payment be made?
The legality and ability of this executive order to go into effect is already under question and will likely be challenged in court, not to mention the time it may take states to implement these changes and funding model.
However the Labor Department has said the $300 a week in federal unemployment benefits could reach claimants by the end of August, assuming states can update their systems to accomodate the new payment structure. This will mean, like the first payment, some states will get this payment out faster than other states. Further the extra unemployment payment amount will range between $300 and $400, depending on how much states can fund their portion of the payment.
Given the legal and political challenges the executive order will face, I would not be banking on seeing the $400 in your bank account or debit card anytime soon. More than anything it will almost force Congress to act quicker to pass something more official to ensure the President does not take political advantage of this situation.
[Update – August 6th] At this stage the $600 extra weekly payment has expired and Lawmakers have yet to reach an agreement around an extension. The latest public proposals are shown below and here is an analysis of the impact of losing the $600 to people’s weekly incomes. Based on the stock market’s inexorable rise people are pricing in a likely extension sooner rather than later (otherwise consumer spending would crash) so stay tuned for what the final details may look like. The White house, is looking to get the Democrats and Republicans to compromise on a $400 weekly payment to year end, by making concessions in other areas of the latest stimulus package being negotiated.
[Proposals] Republicans have proposed a contentious extension to the weekly FPUC supplementary unemployment benefit under their recently released HEALS (health, economic assistance, liability protection, schools) Act. They are proposing to extend the current weekly FPUC unemployment benefit to the end of the year, but doing so in two phases as follows:
- They will cut the current supplementary $600 FPUC weekly payment to $200 per week. This straight line cut would be in effect till the end of September 2020 (or first week of October in some states based on their UIC payment schedule), in order to allow states to implement the second phase approach which ties wages earned before a job loss to the amount of supplementary unemployment benefits paid. The $200 payment would be on top of current state maximums and would have a disproportional effect on states like Florida and Arizona which already have low UIC weekly benefit amounts.
- In the second phase from early October 2020, the Republicans are proposing limiting the total unemployment benefit (supplementary + state amount) to 70% of an individual’s pre job-loss wages rather than a fixed weekly supplementary benefit as is currently in place. The maximum supplementary amount that could be paid would be $500. The calculation of the 70% threshold will be based on a federal Department of Labor formula or by a state proposing an approved alternative method. So for example Jack, who lives in California, was earning $800 p/week before he involuntarily lost his job. His UI payment under the Republican proposal would be limited to a maximum of $560. Assuming he was eligible against other criteria, he would then get the state maximum of $450 plus a supplementary amount $110 only. This compares to the $1050 ($450 + $600) he would get under the current FPUC program. A pretty significant difference.
- For contractors, gig wokers and freelancers this new approach would have a larger impact since consistently proving their income before the job loss will be a challenge. Further it will likely take state UI agencies several weeks to implement this new calculation method and verification processes, which is why $2 billion was included in the HEALS Act states to upgrade their UI systems.
The above counter proposal is in response to the Democrats HEROES act (details below, and passed in the House back in June) which proposed a straight extension of the $600 payment to the end of the year. While the parties are still far apart, the silver lining is that Republicans are finally on board with an extension. The reason the extension is low is purportedly because they want to encourage returning to work where wages would be higher than unemployment for most Americans. But the Democratic controlled house won’t likely accept such significant cuts with many pundits expecting a compromise to result in a supplementary $300 to $400 weekly amount (or an equivalent amount) till the end of the year.
This story is developing as both parties are going to have to compromise on a final extension. The main takeaway is that the $600 payment will be cut, but that the overall FPUC program will be extended to provided supplementary benefits.
[Prior Updates] The expansive pandemic unemployment provisions passed under the CARES act stimulus package have been widely acknowledged as the largest boost to individuals who lost their jobs as a result of the Coronavirus induced slowdown. In particular the extra $600 (FPUC) weekly payment on top of the regular state unemployment compensation has been by far the most effective part of the government’s economic policy response to the fallout from the Coronavirus induced recession and unemployment spike. For over 50 percent of jobless Americans the extra $600 and regular UI weekly payment more than replaced what they were earning from working.
While the debate rages along party lines on extending benefits, Trump administration officials and Congressional Republicans have strongly indicated they don’t want to extend the $600-a-week FPUC supplementary UI benefit past its current expiry at the end of July 2020. They feel the economy is improving and want to encourage workers to go back to work versus relying on the generous enhanced unemployment benefits. This is why they are pushing back-to-work bonus payments or reducing the extra weekly payment to somewhere between $200 and $400, and providing a temporary stipend to those who return to work.
House Democrats, led by Speaker Nancy Pelosi, on the other hand have reiterated the importance of the $600 weekly payment for the millions of unemployed by passing putting a new Stimulus bill in the House, called the HEROES act, which includes an extension of the $600 per week extra unemployment payment (FPUC) through to January 2021 as the current FPUC provisions approved in March are set to expire at the end of July.
There is little doubt that the $600 payment and other enhanced unemployment benefits – in addition the PUA covering those workers not normally eligible for state unemployment benefits or extending existing benefit coverage periods by 13 weeks (under PEUC) for those whose jobs or livelihood were impacted by COVID – will be a big boost to many households. However the roll-out of these new provisions and payment to recipients has been less than stellar to say the least, mainly because of decades of under-investment in the administrative capacity of state UI agencies and systems (many still using mainframes or home grown software) has left them incapable of flexibly in adjusting to the new provisions and determining the eligibility of newly covered worker groups. Even back pay for retroactive payments is taking far longer than planned.
A Compromise on Extending Unemployment Benefits?
It appears highly likely that the President and his administration will have to provide some level of support to the millions of unemployed workers given the resurgence of the Coronavirus in several states that has forced extended business closures. As such a Senate proposal by the Democrats called The American Workforce Rescue Act (AWRA), may provide a party line compromise that the president could get behind, particularly as the presidential election is only a few months away. The AWRA proposal would continue to provide the full $600 extra weekly unemployment payment as long as the states unemployment rate is above 11%. When it drops below 11% (based on a three-month average), it will start to phase out to $0 until the state’s unemployment rate drops below 6%. So essentially $100 less for every percentage drop between 11% and 6% of a state’s unemployment rate.
With the current provisions expiring in a few weeks, I expect that that Congress will eventually craft a bill to extend these UI benefits to the end of 2020 using a hybrid of one of the above proposals – which may well also include another 2020 stimulus check to cover those not eligible for unemployment benefits.
The table below shows the impact of losing the extra $600 weekly payment against the maximum weekly benefit amount (WBA) current paid by state unemployment agencies. As you can see, in several states it is pretty significant and the impact is much, much higher if you are not getting close to the maximum amount in your respective state.
|State||Standard UIC Max. Weekly Benefit||UIC WBA + $600||% UIC Income Lost|
|District of Columbia||$444||$1,044||135%|