Unemployment aid: When would the $300-per-week benefit begin?

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About 12 million jobless workers were on track to lose their unemployment benefits on December 26, due to the expiration of two pandemic-crisis programs. But a lifeline came on Monday when Congress passed a $900 billion stimulus package that would extend those programs, as well as add $300 in extra weekly jobless pay. 

Now the timing of that lifeline is up in the air for a number of reasons, including President Donald Trump’s last-minute demand for changes to the bill. 

While Mr. Trump on Tuesday evening aired grievances about several issues in the bill, his more pointed complaints were directed toward the $600 direct stimulus payments, which he called “ridiculously low.” Mr. Trump also commented on a tax break for business meals, which he said should be extended for longer than the two years stipulated by the bill.

Mr. Trump didn’t address the issue of unemployment aid, however. The stimulus bill would extend two major pandemic programs for 11 weeks, as well as top up regular state benefits with an extra $300 in weekly jobless aid. While the new round of aid will undoubtedly provide welcome relief, it’s just half of the extra $600 in aid received by jobless workers at the start of the pandemic and which expired in July. At the same time, the number of people applying for jobless aid remains at a high level, showing that the coronavirus continues to take a toll on the economy.

“A lot of workers are concerned because they have gone in the hole during their unemployment; they have built up debt,” said Andrew Stettner, an expert on unemployment with the left-leaning Century Foundation. “Some of the research shows that the average unemployed person has a negative net worth.”

The extra $300 a week, as well as additional weeks of unemployment, probably won’t be enough for many jobless workers to dig themselves out of debt, Stettner added, but would likely help many meet their basic needs — at least until the programs expire in mid-March.

Kenneth Elliott, 50-year-old ride-hail driver in West Palm Beach, Florida, has been out of work since March. Between April and July he was able to qualify for $600 a week in additional benefits, which covered his expenses. But since August, he’s been living on just $275 a week in state unemployment benefits, “which is kind of not survivable,” he told MoneyWatch recently.

Several months ago, Elliott gave up his own apartment and moved in with a friend to try to save on housing costs, he told CBS MoneyWatch. But the $275 still doesn’t cover all his expenses, which include medical insurance, car insurance and his telephone bill, so he’s found himself falling behind on rent.

“I’ve been fortunate to have a very understanding landlord that’s trying to work with me, but I don’t know how far that’s going to go,” Elliott said. “I’m getting down to the wire.”

A month of waiting?

Democrats are now trying to change the stimulus bill, following Mr. Trump’s urging, to bump up stimulus checks to $2,000 per person, from the $600 currently in the legislative text. That effort will delay the stimulus package, which means jobless Americans could be looking at a longer wait for that extra $300 in weekly unemployment assistance. 

But even before Mr. Trump made his objections, it was likely that many states would have required as long as three to four weeks to start paying out the extra $300 in weekly benefits, Stettner said. Those benefits would stem from the Federal Pandemic Unemployment Compensation (FPUC) program, which was created by the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March, but expired in July. In order to get those $300 payments out, states would first need to get that program up and running again after a long gap.

Unemployment programs are run independently by each state, and jobless workers apply for aid through their state labor departments. Depending on the efficiency of their state’s computer systems and staffing, jobless workers can experience very different wait times for receiving benefits. Some states may be able to send the $300 in FPUC benefits quickly, but others may see longer delays.

For instance, 8 of 10 jobless workers in Wyoming receive their jobless benefits within 14 days of being deemed eligible for the benefits, according to the Century Foundation. But only 2 in 10 out-of-work people in Kentucky receive their first payments within two weeks.

Gap in benefits

The delay to the stimulus bill could also create a gap in the current benefits paid out to jobless workers. 

About 12 million are receiving jobless benefits through two programs that will expire on December 26: the Pandemic Unemployment Assistance (PUA) program, which covers gig workers and self-employed workers, and the Pandemic Emergency Unemployment Compensation (PEUC) program, which provides additional weeks of jobless aid to those who have run out of their regular state unemployment benefits. 

The stimulus bill approved by Congress on Monday was aimed at preventing a benefits cliff for jobless workers, currently on those programs, by extending those programs through March 14. The two programs currently pay regular state unemployment benefits, which on average are slightly more than $300 per week. 

“It is quite certain there will be a delay for people now” who are on those soon-to-expire programs, Stettner said. “At the very best, they will miss a week of benefits.”

However, the benefits would be paid retroactively once a bill is signed by Mr. Trump. Jobless workers should continue to file for their benefits even if there is a gap to ensure they receive back pay, Stettner noted. 

“It will impact people, that’s why it’s important to get this passed,” Stettner added. “People will blame the states because that’s who they know, but that’s a misplaced blame. Congress took forever, and now the president is delaying it even further.”

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