Congressional Republican leaders have announced that an extension of the extra $600 weekly unemployment benefit likely won’t happen by the end of July when it is scheduled to expire. This will likely be a big blow to the millions of unemployed Americans who depend on the additional federally funded weekly payment, that comes on top of regular state unemployment benefits, to make ends meet. The table below shows the percentage impact of losing the $600 weekly benefit on a state-by-state basis against the current maximum unemployment weekly benefit amount. Those states with already low state unemployment benefits are going to be hit especially hard. Further, the impact would be much higher for those eligible or getting less than the current state maximum since you only needed $1 or more of state unemployment benefits to get the full $600 payment.
The latest Republican proposal (and there are a few out there) does plan to extend the extra Federal pandemic unemployment compensation (FPUC) weekly payment but would significantly reduce the amount of money flowing each week to those without a job or only able to work part-time due to the COVID pandemic. The current Republican proposal would cut the $600 weekly FPUC benefit by more than half ($200 to $300), which when added to current state benefits, would theoretically amount to 70 percent of what a worker was making before they lost their job, versus the current 130 percent the $600 payment theoretically provides. The logic behind this is that the lower benefit would encourage people to return to work or look for a new job sooner rather than later.
Democrats, who want to keep the additional $600 extra weekly payment going, say there are significant hurdles for state labor and unemployment departments to implement the Republican plan which wants to tie the unemployment benefit payment to a workers pre-job loss wages. This will be especially hard to do for those gig and independent contractors who don’t have regular wages but currently qualify for the enhanced benefits. Further many economists warn that the reduced assistance would cause rippling damage across the broader economy due to a significant pull back in consumer spending.
With the likely lapse of the FPUC payment next week, at least until an extension plan is agreed upon, unemployment compensation benefits will return to 2020 maximum weekly benefit amounts (WBA) as shown in the table below. The table also shows the percentage impact by state of losing the $600 payment. In many states, like Florida, Alabama and Arizona where the state maximums are less than $300 per week the loss of the $600 payment will result in an over 200% loss of unemployment income on a weekly basis. That’s going to hurt, no matter who you are.
|State||Standard UIC Max. Weekly Benefit||UIC WBA + $600||% UIC Income Lost|
|District of Columbia||$444||$1,044||135%|
Some positive news however is that with the PUA, PEUC and EB programs regular state unemployment payments will be available till year-end irrespective of the FPUC program extension decision delays.
$600 benefit still being processing for eligible retroactive/back payments
Even if the $600 benefit expires at the end of July because Congress and the White House are not able to reach a compromise, state unemployment departments will still be making retroactive payments to those who are eligible for benefits from early April when the program was put in place in most states. New claimants can file back to the date they were made unemployed and would still be eligible for retroactive $600 payments. States will also continue processing claims for those who have filed but have had their $600 payment stopped for a variety of reasons.
This article was updated on July 23