Biden Arpa Unemployment Benefit Extensions
Congressional leaders and the President have now passed another COVID relief stimulus package into law. The package includes funding for extending the $300 FPUC weekly boost, Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation programs to September 6th, 2021 or the earlier end date some states have chosen to end participation in these federally funded programs.
Eligible claimants who certify under existing programs like regular state UI, PUA, PEUC or EB for the applicable weeks will automatically get the extra $300 FPUC unemployment Claimants who had exhausted their PUA or PEUC benefits and needed to wait for their state unemployment departments to update UI programs will be retroactively caught up for back payments in subsequent weeks however their may be some manual intervention required in certain cases as discussed below.
Why Did Benefits End Early In So Many States
Citing labor shortages in the spring, 26 state governors claimed pandemic-related unemployment benefits were producing limited incentives for workers to take jobs. Many economists and analysts disagreed, highlighting several factors that prevented people from finding suitable work, including low wages, lack of health care, inadequate child care and fear of contracting COVID-19.
With unemployment claims still fluctuating as the economy struggles to return to pre-pandemic “normalcy,” reports are showing that the early cancellation of the federal programs had little impact on labor markets. A recent JP Morgan Chase Institute study confirmed that states that ended supplemental unemployment insurance programs during the summer saw a limited impact on job growth.
According to an August report by the Century Foundation’s Andrew Stettner, “Politics, not economics, drove the attack on unemployment insurance.” The states that cut off the enhanced benefits before the federal expiration were mostly Republican-led.
Arkansas, Indiana and Maryland were slated to cut off benefits early, but successful lawsuits forced those states to preserve the federal coverage, at least temporarily. In issuing their rulings, judges noted that the ending of benefits made it harder for the unemployed to afford basic needs. Lawsuits were also filed against state governors elsewhere, which were either denied by judges or are still held up in the courts.
Who Lost Federal Unemployment Benefits On Labor Day
At the very start of the pandemic, the March 2020 CARES Act established temporary federal unemployment aid programs, and the American Rescue Plan in March 2021 extended those benefits to Labor Day. Here’s who was affected by the programs’ expiration, according to a detailed analysis of Labor Department data by the Century Foundation.
More than 3 million additional people lost Federal Pandemic Unemployment Compensation, the weekly bonus — initially $600, then $300 — that helped out-of-work Americans supplement benefits and recover some lost wages. If you’re still eligible to collect state unemployment insurance , you’ll continue to receive some compensation after the cutoff. But the amount will be lower without the weekly $300 bonus.
Some 3.3 million people lost all their Pandemic Emergency Unemployment Compensation, or PEUC, which extended aid to those who had already exhausted their state’s benefits period . This category includes workers who would have no longer been eligible to receive unemployment because they passed their state’s benefit window. The program provided up to 53 weeks of additional aid for those who had exceeded state allowances.
That’s not the full picture of everyone affected by unemployment. Reported jobless rates generally don’t account for those who have left the labor force entirely and are no longer counted as looking for work, such as the long-term unemployed.
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Take Out An Unsecured Personal Loan
Personal loans offer a lump sum of cash that you repay in fixed monthly payments over a set period of time, typically a few years. They’re generally unsecured, meaning they don’t require collateral, so lenders determine eligibility based on borrowers’ creditworthiness.
Personal loan interest rates vary based on several factors, such as the borrower’s credit score, the loan duration, and the loan amount. Borrowers with an excellent credit score will qualify for the lowest interest rates available.
Personal loans can be a wise alternative to taking on revolving credit card debt thanks to lower, fixed interest rates. The average interest rate on a two-year personal loan was 9.58% in Q2 2021, compared to an average credit card interest rate of 16.30% on all accounts assessed interest, according to the Federal Reserve.
If you decide to borrow a personal loan, be sure to compare interest rates across multiple lenders to ensure you’re getting the lowest possible rate for your situation. You can compare personal loan rates without impacting your credit score on Credible, so you can know you’re getting a good deal before you apply.
One Of My Workers Quit Because He Said He Would Prefer To Receive The Unemployment Compensation Benefits Under The Cares Act Is He Eligible For Unemployment If Not What Can I Do
No, typically that employee would not be eligible for regular unemployment compensation or PUA. Eligibility for regular unemployment compensation varies by state but generally does not include those who voluntarily leave employment. Similarly, to receive PUA, an individual must be ineligible for regular unemployment compensation or extended benefits under state or federal law, or pandemic emergency unemployment compensation, and satisfy one of the eligibility criteria enumerated in the CARES Act, as explained in Unemployment Insurance Program Letter 16-20. There are multiple qualifying circumstances related to COVID-19 that can make an individual eligible for PUA, including if the individual quits his or her job as a direct result of COVID-19. Quitting to access unemployment benefits is not one of them. Individuals who quit their jobs to access higher benefits, and are untruthful in their UI application about their reason for quitting, will be considered to have committed fraud.
If desired, employers can contest unemployment insurance claims through their state unemployment insurance agencys process.
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Lower Your Monthly Student Loan Payments By Refinancing
Student loan refinancing is a popular way for college graduates to secure a lower interest rate on their student loan debt. You may be able to lower your monthly payments, get out of debt faster, and even save money in interest over time.
Well-qualified borrowers who refinanced to a longer-term loan on Credible were able to save more than $250 on their monthly student loan payments on average, all without increasing the overall cost of borrowing. See if student loan refinancing is right for you using this calculator from Credible.
It’s important to note that refinancing your federal student loans into a private loan will make you ineligible for federal protections like income-driven repayment plans, administrative forbearance, and student loan forgiveness programs. If you have private student loans, though, you have nothing to lose by refinancing to a lower rate.
Lock in a lower student loan rate by shopping around on Credible. You can compare multiple private lenders at once and choose the offer that’s best for you.
DEMOCRATS WANT FEDERAL STUDENT LOANS PAUSED UNTIL MARCH 2022
Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at and your question might be answered by Credible in our Money Expert column.
Skepticism In The Senate
Once the partisan bill passes the lower chamber, where Democrats only have a three-seat majority, the $3.5 trillion reconciliation bill must get through the Senate split 50-50. There, any measure to extend the federal unemployment programs will face stiff opposition in the Democrat caucus. Insider reports that some of members that caucus are skeptical about continuing the enhanced jobless aid.
Senator Joe Manchinhas already said earlier this month that he would not back extending the Pandemic Unemployment Assistance or Pandemic Extended Unemployment Compensation . The economy is stronger now, the job market is stronger. Nine million jobs we can’t fill. We’re coming back, he said. Adding I’m done with extensions. He held up the vote on the American Rescue Plan until it was agreed to shorten the duration of the federal benefits programs by over a month.
Independent Senator Angus King who caucuses with Democrats has also expressed doubts about the programs. “Right now, there’s something like 8 million unemployed people and 10 million open jobs,” he said.
NEW: Millions of Americans face financial cliff as eviction ban, unemployment aid lapse amid Washington inaction. Simply put, the WH can’t reissue moratorium, and neither WH or Congress are going to renew benefit boost
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What Should I Do Once Unemployment Benefits Run Out
Nows the time to focus on what you can do to better your financial situation and develop a plan moving forward. Here are a few actions you can take to get started, which we have collected over time from experts:
- Start looking for a survival job to help cover your necessary living expenses, even if it doesnt align with your long-term career goals.
- Reassess your budget and make it as lean as possible by cutting back on non-essential spending and other potential costs. If you dont have a budget, start one by following these tips.
- If you have an emergency fund, now is the time to rely on it.
- If you dont have an emergency fund but have a 401, you may be able to tap into it penalty-free via loans or even special hardship withdrawals through Sept. 30. If you arent eligible, consider withdrawing from your 401 only as a last resort.
- Ask your circle of friends, family, or work colleagues for help if youre struggling financially. They may be able to temporarily help you out or guide you on what to do next if you talk to them about your situation.
- Reach out to organizations in your community for assistance, such as local food banks, charities, and nonprofit centers.
- When possible, restock your emergency savings. Even if youre contributing only $5 a week back to your fund, it will build up over time.
If youre feeling overwhelmed or guilty about your finances, give yourself some grace and practice self-care. Your mental health matters just as much as your financial health.
Could Pandemic Benefits Be Reinstated
As the federal expiration deadline approached, White House officials made it clear they were not planning to continue the enhanced jobless benefits past Labor Day, saying they were intended to be temporary. When multiple states pulled out of pandemic-era unemployment programs prematurely during the summer, Labor Department officials had said their hands were tied and they couldn’t counter decisions by governors.
On Sept. 15, Rep. Alexandria Ocasio-Cortez announced that she would be introducing a bill to retroactively extend enhanced jobless benefits until February 2022. Saying she’s not sure of the prospects of the legislation being passed, Ocasio-Cortez noted that she “could not allow this to happen without at least trying.” The following day, she and 12 other Democratic lawmakers wrote a letter to the House leadership urging them to include an expansion of unemployment aid in the $3.5 trillion budget package known as the Build Back Better Act.
It’s not clear at this time which states will choose to use any leftover pandemic funds to continue jobless benefits. According to a CBS News report, not every state has shut the door to continuing some benefits, with some local officials reviewing options for providing assistance after the Labor Day expiration.
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I Am About To Exhaust My Regular Unemployment Compensation Benefits What Kinds Of Relief Does The Cares Act Provide For Me
Under the CARES Act states are permitted to extend unemployment benefits by up to 13 weeks under the new Pandemic Emergency Unemployment Compensation program. PEUC benefits are available for weeks of unemployment beginning after your state implements the new program and ending with weeks of unemployment ending on or before December 31, 2020. The program covers most individuals who have exhausted all rights to regular unemployment compensation under state or federal law and who are able to work, available for work, and actively seeking work as defined by state law. Importantly, the CARES Act gives states flexibility in determining whether you are actively seeking work if you are unable to search for work because of COVID-19, including because of illness, quarantine, or movement restrictions.
In addition, if you have exhausted the 13 weeks of additional benefits available under the PEUC program, you may be eligible to continue receiving benefits under the PUA program. PUA benefits are available for a period of unemployment of up to 39 weeks, meaning that if you have exhausted regular UC and PEUC benefits in fewer than 39 weeks, you may be eligible to receive assistance under PUA for the remaining weeks within PUAs 39 week period.
What Is An Offer Of Suitable Employment And How Is It Connected To Unemployment Insurance Eligibility
Most state unemployment insurance laws include language defining suitable employment. Typically, suitable employment is connected to the previous jobs wage level, type of work, and the claimants skills.
Refusing an offer of suitable employment without good cause will often disqualify individuals from continued eligibility for unemployment compensation.
For example, if an individuals former employer calls the individual back to work after having temporarily laid the individual off for reasons related to COVID-19, the individual would very likely have to accept the offer to return to work, or jeopardize his or her eligibility for unemployment insurance benefits, absent some extenuating circumstance, such as if the individual tested positive for COVID-19. The job an individual held before the spread of COVID-19 will constitute, in the vast majority of cases, suitable employment for purposes of unemployment insurance eligibility.
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Reinstating And Extending The Pandemic Unemployment Insurance Programs Through 2021 Could Create Or Save 51 Million Jobs
- While the economy remains 10 million jobs below pre-pandemic levels and job growth is slowing significantly as the pandemic surges, the remaining suite of pandemic unemployment insurance programs are set to expire on December 26, even as one of the most importantthe extra $600 per weekhas already expired and millions of workers have already exhausted benefits or had them significantly slashed.
- The economic shock from COVID-19 has been ongoing long enough that roughly one-third of unemployed workers have been unemployed for 27 weeks or longer. Unemployment insurance benefits should not just be made much more generous, they should also have their durations extended substantially. Once again, this highlights that UI benefit generosity and duration should never be tied to arbitrary dates but should rather be dictated by economic conditions .
- If these programsincluding the extra $600are reinstated and extended through 2021, and if the virus is brought under control so that economic growth for 2021 returns to being simply a function of aggregate demand growth, the economy would be boosted by 3.5% and 5.1 million more jobs would be added in 2021.
All told, we find that if these programs effectiveness is maintained through 2021, and if the virus is brought under control so that economic growth for 2021 returns to being simply a function of aggregate demand growth, the economy would be boosted by 3.5% and 5.1 million more jobs would be added in 2021.
States Not Extending Enhanced Benefits
Per the latest update no state unemployment agency has extended enhanced unemployment benefits, despite already approved stimulus funds being available for states to use and President Biden calling for the states to do so.
The main reason apparently is the overly high cost of running these enhanced UI programs , which was originally paid for using federal funding allocated to administer these programs. The cost of running and administering these programs was apparently running into the hundreds of millions of dollars in large states.
Further extending benefits to a relatively small percentage of the population would be politically hard to justify given the falling unemployment rate and persistent issues business are facing with filling open vacancies.
Ill continue to post updates as more information comes to hand and you can stay connected via the options below.
You can also see more on how retroactive benefit payments will be made to claimants for weeks they were eligible/covered under the enhanced unemployment program.
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Advantages Of Extended Unemployment Benefits
Paying benefits has a similar, but even more direct effect as that of lower interest rates. Benefit payments give the unemployed more money to spend, increasing demand.
Most government spending takes the form of job programs, in which the government hires workers and businesses directly to build things or provide services. Benefits eliminate the middleman. In doing so, benefits put money directly into the pockets of those who will spend it right away. This is why many feel unemployment benefits are the best stimulus.
How Is The New Stimulus Payment Determined
The package includes a new round of $1,400 payments for individuals with an adjusted gross income of up to $75,000, heads of household with income up to $112,500, and $150,000 for joint filers.
After that threshold, the payment amounts will be reduced until a ceiling is reached: $80,000 for single filers, $120,000 for heads of household, and $160,000 for married couples. No one with income above those ceilings will receive money in this round of stimulus payments.
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A New Bill To Extend Benefits Emerges
Progressive Democrats, including Representatives Cori Bush and Alexandria Ocasio-Cortez, are pushing a new bill to reinstate federal benefits with retroactive coverage.
Were introducing a bill to extend all federal pandemic unemployment insurance through Feb. 1. Benefits would be retroactive to Sep. 6.We cant let pandemic unemployment assistance lapse when were still recovering from the cost effects of the pandemic.
Rep. Alexandria Ocasio-Cortez
Before the programs had ended, Rep. Ocasio-Cortez and others had proposed legislation to extend the programs, but they were persuaded to drop the effort. President Biden had made it clear to House leadership, including Chairmen Neal of the Ways and Means Committee, that he wanted to see if there was clear evidence an extension was needed.
With Goldman Sachs projecting that more than 700,000 households could be evicted this year, the warnings could not be stronger. The Washington Post has also reported that many seniors officials within the administration made clear” to the President that “the benefits cliff poses a serious danger to millions of Americans who remain out of work.
How long would the benefits be ended under the plan?
During a town hall hosted by Rep. Ocasio-Cortez, she said that the new bill would extend benefits through February 2022. The bill would also allow those eligible to claim benefits retroactivelyfrom 6 September.
How likely is it that the bill is passed?