Received the following comment from some higher income people who have fallen into what I call the Unemployment Insurance Stimulus Hole (#UIShole). Yes, I know how it sounds and it is intentional because people who face this situation probably want to use a word that rhymes with #UIShole for the politicians that passed the enhanced unemployment provisions that allowed this hole in the legislation.
I am working half my hours now, make too much for state UI weekly max, still file my claim every week. I am still not making enough to cover my bills. Will I get the $600 per week because my hours are reduced (Christine)Part Time Workers getting UIC + $600
Has anyone determined if workers that are on partial furlough and are making too much on their reduced pay to qualify for unemployment will get the 600.00 anyway?
The Department of Labor (DOL) guidance is pretty clear that you have to qualify for a partial or nominal amount of UI compensation to qualify for the entire $600 weekly unemployment stimulus payment. Or as stated in the DOL guidance, even if the individual is eligible to receive at least one dollar ($1) of underlying benefits for the claimed week, the claimant will receive the full $600 FPUC.
So even though some workers are seeing a significant drop in income by having to work fewer hours due to a partial furlough or having to go part time, their income over the last year (or relevant qualifying period) in many states will still be far higher than the partial payment they could get from unemployment insurance.
Now many states, like PA and CA, offer a Partial Unemployment Benefit Credits to offset the impacts of the part time unemployment hole, but in many higher income states this won’t make much of an impact. Also with the $600 stimulus payment now in play, many people who don’t qualify for even $1 of unemployment insurance won’t get this supplementary payment for the next four months it is in effect. Which could make them worse overall.
Here is an example based on a reader comment. Mary lives in California (CA) and was making $2,400 per week – which in CA or higher income states is not that unusual. Mary had her hours cut was only getting $1840 p/week. California’s maximum state unemployment is $450 and has a provision where if a person works part time (through no fault of their own) he/she shall be paid with respect to that week an unemployment compensation amount less the larger of the following $25 or 25% of wages payable to them during that week. For example, if you earned $100 in a week, the Department would not count $25 as wages and would only deduct $75 from your weekly benefit amount. For someone who gets the maximum weekly benefit amount of $450, would be paid a reduced amount of $375.
So in Mary’s case she will qualify for the maximum WBA ($450). But because she is still working and earned more than $25 she will need to deduct 25% of wages earned, which in this case is $460. This means she will not qualify for an UIC since this amount is $10 more than the maximum UI WBA in CA ($460 – $450). And because she does not get any unemployment insurance compensation she won’t qualify for the $600 UI stimulus payment. This actually makes her worse off than someone earning a few hundred dollars less and so gets to qualify for State UI (even $1 is enough!) and the $600 stimulus payment.
The recently approved CARES Act also has some additional programs designed to keep part-time workers entitled to assistance if their hours are cut for reasons due to Coronavrius or COVID-19. But you will need to file a claim and check with your state unemployment’s office to see how their part time provisions affect you. I will write more about these in an upcoming article. But feel free to share your thoughts below of let me know if I missed something.
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