President Trump’s executive order on extending extra weekly benefits looks like it will provide much needed relief to millions of unemployed and under-employed Americans given Congress’ inability to compromise on a new stimulus bill which was supposed to include an extension of funding for the FPUC benefit (which was $600 p/week until the end of July 2020). Based on recent Department of Labor guidelines, Trump’s executive order will be enacted through the Lost Wages Assistance (LWA) Program and have the following features:
The LWA program will extend the extra weekly unemployment payment until the end of the year, or until funding runs out. Under the program the extra UI benefit will cut the overall weekly payment to between $300 and $400, depending on how much states can fund of their obligation (up to 25%) of the extra weekly unemployment payment versus federally owned funding (75%). The payments will be valid from August 1st 2020 to the end of December 2020, subject to funding availability.
While the federal component of this weekly payment ($300 or 75%) will be funded under the FEMA program, the states can fund their $100 component out of the Coronavirus Relief Fund (CRF), provided under the CARES Act or other state funding. Alternatively, and importantly under DOL guidance, states may count funds that are already used to provide regular state UI payments toward the state match. If this is the case then the revised extra FPUC weekly UI amount will only be $300.
This is BIG deal because many states will likely just count their existing UI payments towards their state match, leaving the extra weekly payment to the federally funded $300! Which is a 50% drop from recently expired FPUC levels. While this will be in addition to existing state UI payments, it will still be a large cut for many families and jobless workers who relied on the earlier $600 FPUC payment.
[July-August 2020 update around 2020 $600 FPUC extension] Despite all the payout challenges with the enhanced unemployment benefits, millions of Americans have been benefiting from the $600 FPUC payment (detailed below in previous update) while they survive Coronavirus induced shutdowns or job losses. But with the $600 payment officially set to end at the end of July 2020, many Americans are asking if the $600 payment will be extended?
You can see a more detailed analysis here, but as with everything government related nowadays this has become a political issue. Republicans have indicated that they don’t want to extend the $600-a-week UI benefit past its current expiry. They feel the economy is improving and now want to encourage workers to go back to work versus relying on the generous enhanced unemployment benefits. This is why they are pushing for either a cut to the current $600 weekly amount to something around $200 to $300 p/week and/or providing back-to-work bonus payments. The argument here is that the current $600 weekly federal unemployment payment on top of regular state unemployment benefits is 133% more than the average income for most jobless Americans. They want to move to something like 60% to 70% of the average income, which will encourage people to go back to work (assuming their job still exists).
House Democrats, led by Speaker Nancy Pelosi, have confirmed 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. However it is likely they will have to compromise with Republicans to get something passed.
My bet is that a compromise will be reached where the unemployment benefits will be extended to the end of the year, but the amount of extra UI payments will be reduced and/or progressively tied to the states unemployment. There will also likely be a matching incentive to workers if they go back to work. But stay tuned for more updates.
Note – PUA unemployment benefits will continue to the end of the year while retroactive $600 payments will also likely continue into August as state UI agencies catch-up on payouts to eligible recipients.
[Previous update] Under the latest Coronavirus stimulus bill (CARES act) unemployment compensation insurance has been extended by 13 weeks and boosted by adding $600 per week for up to four months, on top of what beneficiaries normally receive from states. It also expands eligibility for unemployment checks to self-employed people and independent contractors. More details and specific state payment dates shown below.
When will the $600 Unemployment Benefit Payment Start?
The U.S. Department of Labor (DOL) has now provided guidance to states for implementation of the Pandemic Unemployment Assistance (PUA) programs and the $600 per week extra unemployment (FPUC) approved under the CARES act. While most state labor departments and unemployment agencies have implemented the enhanced unemployment programs, they have been very slow in getting payments out due to issues with updating policies and systems to accommodate the mandated changes. As a result state UI agency websites are behind on processing the additional $600 p/week payment to eligible recipients. Payments to those already receiving unemployment should be automatic, while others or newly unemployed will need to (re-)apply for the UI payments. The table at the end of the post shows states who are now paying the $600 payment based on their State Labor/UI website.
Will I get the full $600? The $600 is added to whatever amount you are currently getting in terms of regular unemployment insurance compensation (UIC), whether it’s the minimum or the maximum. So for example even if you are only getting $50 a week in unemployment benefits today you will still get the full $600 through the next four months (July 31, 2020) which is mandated in the stimulus bill. Note: regular state unemployment compensation includes UCFE, UCX, PEUC, PUA, EB, STC, TRA, and DUA.
Also note that the $600 weekly FPUC payment is paid retroactively. The DOL has specified that states who agree to participate and take the federal funding for the enhanced benefit program under the CARES act must provide retroactive payments to individuals eligible for FPUC for the weeks they would have been entitled. So assuming your state agrees to take part in the DOL program at the end of March (and most states have done so) payments would be effective starting with the week ending 4/5/20. So, if it takes your state UI agency until mid-April to actually start the payments, they will be retroactive back to 4/5/20.
The $600 only applies to those who are receiving regular or PUA state unemployment benefits. If your state said that you don’t qualify for any amount of unemployment compensation, then you do not get the $600 either. The bill also waived the 7 day waiting period for new claims or if you lost your job due to any COVID-19 related reason. So you can file as soon as you get laid off or lose income as a self employed person.
Do part time workers or those getting partial UIC qualify for the $600 unemployment stimulus?
Yes. The Department of Labor (DOL) issued Unemployment Insurance Guidance Letter 15-20 (UIPL 15-20) that alludes to the fact that individuals who are entitled to receive regular unemployment compensation (UC) will also receive the $600 flat weekly payment through July 31, 2020. There is no minimum limit of unemployment compensation that is specified in the DOL guidelines, so even qualifying for a partial amount (i.e the case for part time employees) would qualify the employee for the $600 weekly payment. See more for part-time workers on getting this payment.
State by State Status on $600 payment
The following table shows how the current state administered maximums would increase with the supplementary $600 provision and which states are now paying these. However the roll-out of the enhanced UIC payments for those able to file new claims has been much slower than planned (see details). This information is changing daily so please let me know if you see an changes and I always recommend checking your local state labor or unemployment site to get the official payment dates specific to your claim.
|State||Maximum PUA Amount|
|District of Columbia||$444|
Naturally the above flat weekly increases are creating controversy as the new maximums could exceed what workers make from normal jobs and actually encourage employees to temporarily lay off employers while things are slowed down due to the Coronavirus induced shutdowns.
Will I get the $600 payment if I owe the IRS money or pay child support?
Individuals who currently have a debt with the IRS (or other government agencies) are still eligible for the $600 payment even if 100% of their weekly benefit amount is currently intercepted. Child support obligations however must be deducted from FPUC payments in the same manner and to the same extent as these obligations are deducted from regular UIC. Generally one-half of your $600 payment will be deducted and applied to your court ordered or voluntary child support or repayment of an UI over payment.
Since unemployment benefits are administered at the state level, please check your state’s UI website and file a claim to confirm your specific entitlement. Also note that the $600 payment is taxable and will be shown as income in your 1099G.