What we know about the extra $300-a-week unemployment benefit

By Zack Friedman, Forbes

When do the $300 weekly unemployment benefits start?

Here’s what you need to know – and what it means for you.

Unemployment Benefits

According to a new memo from FEMA (Federal Emergency Management Agency), the $300 enhanced weekly unemployment benefits will not be available until late August. Unemployed Americans have been waiting for supplemental weekly unemployment benefits since the $600 a week enhanced unemployment benefits expired in late July. Congress did not finalize a stimulus bill or pass standalone legislation to extend the weekly benefits, which left millions of Americans without the benefit that Congress approved through the Cares Act, the $2.2 trillion stimulus packaged passed in March. Currently, Congress is on summer recess and likely will not pass a stimulus bill, if Congress passes a stimulus bill, until at least September.

Last week, after weeks of failing to secure a stimulus deal, President Donald Trump issued an executive order that would have provided $400 a week in supplemental unemployment benefits. However, the $400 benefit was contingent upon states funding 25%, or $100. Later, the U.S. Labor Department said that states could apply their current state unemployment benefits toward the 25% share, which effectively reduced the weekly unemployment benefit to $300 instead of $400. To date, no state government has agreed to fund the supplemental $100.

What date will unemployment benefits start?

There is not a universal date that supplemental unemployment benefits will begin in your state. According to the FEMA memo, the U.S. Labor Department estimates an average of three weeks from August 8, 2020, which implies an average start date of August 29, 2020. For reference, Trump signed the presidential memorandum on unemployment benefits on August 8, 2020.

Are these unemployment benefits first come, first served?

While these weekly unemployment will be federal benefits, each state must apply for a grant to receive the funding. FEMA says that “approved grant applicants will receive an initial obligation of three weeks of needed funding.” After this period, additional disbursements will be made on a weekly basis. This suggests that states will receive at least three weeks of guaranteed funding, but that any future funding will only be week to week.

How long will these unemployment benefits last?

These unemployment benefits are not unlimited. So, it’s possible that you may still be unemployed and no longer receive these benefits. These federal unemployment benefits will be available until the earlier of:

  1. FEMA spends $44 billion from the Disaster Relief Fund (DRF); or
  2. The total unobligated balance of the DRF decreases to $25 billion; or
  3. Congress passes legislation for supplemental federal unemployment benefits, or
  4. December 27, 2020.

Who is eligible to receive these unemployment benefits?

It’s important to read the fine print. Not everyone will be eligible for these supplemental weekly unemployment benefits. To qualify, you must be eligible to receive at least $100 of weekly unemployment benefits from August 1, 2020 from an existing unemployment program such as state unemployment or other pandemic unemployment compensation programs, for example. You also need to self-certify through your state that you are unemployed or partially unemployed due to the Covid-19 pandemic.

Are these the only unemployment benefits available?

No. These are federal unemployment benefits that are supplemental to existing unemployment benefits. You can still collect traditional unemployment benefits through the state where you last worked. Here are a few examples:

  • State Unemployment Benefits: In most states, you are paid weekly and can receive unemployment benefits up to half your wages, subject to a maximum benefit. Most states such as New York, California and Texas offer 26 weeks of unemployment benefits through a state-funded unemployment insurance system.
  • Pandemic Compensation: You can still receive up to 39 weeks of unemployment through Pandemic Emergency Unemployment Compensation(PEUC), which provides an additional 13 weeks of unemployment benefits.
  • Pandemic Unemployment: If your state provides less than 39 weeks of unemployment benefits, you can receive the difference through Pandemic Unemployment Assistance (PUA).

Will the next stimulus package include unemployment benefits?

Currently, Congress has not reached a stimulus deal, and is not expected to consider the next stimulus bill until at least September when members officially return from summer recess. Importantly, there is no guarantee that there will be another stimulus package. If there is another stimulus bill, supplemental unemployment benefits are a central policy issue. Democrats want to maintain the $600 weekly unemployment benefits that expired in July. Republicans are focused on a 70% wage replacement measure, which would provide supplemental wages based on your income when you were last employed. There are alternative proposals in Congress as well. For example, Sen. Mitt Romney (R-UT) and other Senate colleagues proposed a three-month weekly unemployment benefits extension based on a sliding scale of wage replacement. Under Romney’s 80% wage replacement proposal, the wage replacement would be capped at $500 a week in August, $400 a week in September and $300 a week in October. Thereafter, the unemployment benefits would expire. Sen. Ron Wyden (D-OR) has a plan to extend unemployment benefits that would base the duration and amount of unemployment benefits in a particular state based on that state’s unemployment rate.

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