Biden Stimulus Package Unemployment Extensions
Congress and President Biden have now passed into law the $2 trillion stimulus package, also known as the American Rescue Plan . It includes further unemployment program extensions until September 6th, 2021 for the PUA, PEUC and FPUC programs originally funded under the CARES act in 2020 and then extended via the CAA COVID Relief Bill. The need for another unemployment stimulus was reinforced by the prevailing high unemployment situation in many parts of the country due to the ongoing COVID related economic fallout.
If You Were Not Eligible
If we reviewed your claim and you were not eligible for FED-ED, we mailed you a Notice of Determination for Federal-State Extended Duration Benefits within five to seven days. This notice explains why you were not eligible and includes information on how to appeal if you do not agree with the determination.
A Compromise On Extending Unemployment Benefits
It appears highly likely that the President and his administration will have to provide some level of support to the millions of unemployed workers given the resurgence of the Coronavirus in several states that has forced extended business closures. As such a Senate proposal by the Democrats called The American Workforce Rescue Act , may provide a party line compromise that the president could get behind, particularly as the presidential election is only a few months away. The AWRA proposal would continue to provide the full $600 extra weekly unemployment payment as long as the states unemployment rate is above 11%. When it drops below 11% , it will start to phase out to $0 until the states unemployment rate drops below 6%. So essentially $100 less for every percentage drop between 11% and 6% of a states unemployment rate.
With the current provisions expiring in a few weeks, I expect that that Congress will eventually craft a bill to extend these UI benefits to the end of 2020 using a hybrid of one of the above proposals which may well also include another 2020 stimulus check to cover those not eligible for unemployment benefits.
The table below shows the impact of losing the extra $600 weekly payment against the maximum weekly benefit amount current paid by state unemployment agencies. As you can see, in several states it is pretty significant and the impact is much, much higher if you are not getting close to the maximum amount in your respective state.
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Congress Extended Unemployment Benefits What Should Come Next
Americans receiving enhanced unemployment compensation during the pandemic will see their benefits continue, due to the passage of the American Rescue Plan. Lauren Bauer explains how those benefits have affected household finances and workers behavior, and why Congress should prepare for the next recession by adding automatic triggers to unemployment safety net programs.
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Thanks to audio producer Gaston Reboredo, Chris McKenna, Fred Dews, Marie Wilken, and Camilo Ramirez for their support.
TRANSCRIPT
PITA: Youre listening to The Current, part of the Brookings Podcast Network. Im your host, Adrianna Pita.
Included in the American Rescue Plan, the $1.9 trillion COVID relief package signed on Thursday by President Biden, is an extension of federal unemployment benefits for workers who lost their jobs during the pandemic. This latest extension comes just in time, as previous unemployment benefits were due to expire this weekend.
Here to talk to us about why unemployment insurance is so important, and how to make the system better is Lauren Bauer, a fellow in Economic Studies and the Hamilton Project here at Brookings. Lauren, thanks for talking to us today.
BAUER: Anytime, happy to talk about it.
Canada Recovery Sickness Benefit
The Canada Recovery Sickness Benefit is extending until November 20, 2021. The government is also proposing a further extension of this benefit until May 7, 2022 with an increase to the maximum number of weeks.
The Canada Recovery Sickness Benefit provides $500 per week for up to a maximum of 4 weeks, for workers who are unable to work for at least 50% of the week because they contracted COVID-19, self-isolated for reasons related to COVID-19, or have underlying conditions, are undergoing treatments or have contracted other sicknesses that, in the opinion of a medical practitioner, nurse practitioner, person in authority, government or public health authority, would make them more susceptible to COVID-19. This benefit is paid in one-week periods and is available from September 27, 2020 until November 20, 2021.
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What Was Pandemic Emergency Unemployment Compensation
Pandemic Emergency Unemployment Compensation was an emergency program designed to help Americans affected by the COVID-19 pandemic. It was established by the Coronavirus Aid, Relief, and Economic Security Act, a $2 trillion coronavirus emergency stimulus package signed into law by former President Trump on March 27, 2020. After a series of extensions, the program expired on September 5, 2021.
Benefits under the PEUC program were due to expire on Dec. 31, 2020 however, the PEUC was extended to March 14, 2021, and the number of weeks that an individual could claim PEUC benefits was increased from 13 to 24 by the Consolidated Appropriations Act , 2021. The American Rescue Plan Act of 2021 further extended the PEUC 29 weeks for up to 53 weeks through Sept. 5, 2021.
In other words, an additional 40 weeks were added to the original 13 weeks of extended benefits. Check with your state to determine your eligibility for federal benefits.
What Other Federal Programs Are Expiring And When
Pandemic Emergency Unemployment Compensation, as mentioned earlier, is a federal program meant to extend the time a claimant could receive income beyond their baseline allotment of state unemployment insurance, which is 26 weeks.
PEUC added up to 53 weeks of unemployment benefits.
This program will end on Sept. 5. If you have questions regarding PEUC and EB, see this FAQ sheet from the Department of Labor.
Federal Pandemic Unemployment Compensation, or FPUC, provided supplemental payments of $300 per week to claimants, on top of their weekly state unemployment insurance payment.
This program will end on Sept. 5.
Pandemic Unemployment Assistance, or PUA, was launched to provide unemployment income for those who are self-employed, independent contractors or freelance workers. These groups are not eligible for traditional state Unemployment Insurance.
This program will also end on Sept. 5.
New York state will continue to review claims for federal benefits for weeks of unemployment on or before Sept. 5, according to the DOL website. If a claimant certifies for specific benefits and is determined to the eligible, they will be paid for those benefits.
The state will continue to accept new PUA claims for a period of 30 days after Sept. 5. The Department of Labor will evaluate submitted claims for eligibility and backdate payments when appropriate, according to the DOL website.
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How $100 Delayed The Senate Vote
The already-close Senate vote on the third stimulus bill was derailed for more than 10 hours on March 5 by one man: Senator Joe Manchin, a centrist Democrat from West Virginia.
Manchin had been critical of giving too much direct aid to Americans through this round of stimulus funding, stating it could keep people from returning to work, and wanted to target payments like stimulus checks as closely as possible to people most in need of an economic boostnamely, those with lower incomes.
While the version of the stimulus bill passed by the House of Representatives included a $400 weekly federal unemployment benefit supplement through August, Manchin resisted that amount. For several hours, Manchin considered supporting a Republican amendment that would end a $300-weekly unemployment benefit extension in July.
But Manchin eventually agreed to a Democratic proposal to continue the current $300 weekly benefit through Sept. 6, along with the tax break on some unemployment income earned in 2020.
The president has made it clear we will have enough vaccines for every American by the end of May and I am confident the economic recovery will follow, he said in a statement on March 5. We have reached a compromise that enables the economy to rebound quickly while also protecting those receiving unemployment benefits from being hit with unexpected tax bill next year.
Are Unemployment Benefits Ending
Yes, all pandemic unemployment benefits ended Monday on Labor Day, with no grace period to file beyond this date. Payments will be made through the week ending on Friday. At that point, many unemployed Americans will see their benefits cut by $300 a week.
Since the onset of the coronavirus pandemic, the federal government has delivered more than $800 billion in unemployment benefits.
Unemployment checks, originally $600 and then lowered to $300, were enacted last year under the CARES Act by former President Donald Trump. For the first time, independent contractors and gig workers who had lost income due to the economic downturn received unemployment known as the Pandemic Unemployment Assistance.
The government also continued to boost unemployment through the Federal Pandemic Unemployment Compensation in states with reduced unemployment insurance, paying on average an additional $334.
In many cases, jobless Americans could collect both.
Through the American Rescue Plan passed in March, President Joe Biden extended all of these programs, including the maximum duration from 24 to 53 weeks. In states with high unemployment, people could receive up to 86 weeks of benefits.
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How Do I Return Unemployment Benefits I Shouldn’t Have Received
If you received unemployment benefits you were not eligible for , we will send you a notice. It is important to repay this benefit overpayment as soon as possible to avoid collection and legal action. After receiving a notice, visit Benefit Overpayment Services to learn how to repay an existing overpayment.
If you want to repay these benefits before receiving a notice, review the following:
- Benefit check not cashed Return the original check to the EDD.
- Benefit check cashed Send a personal check, cashier’s check, or money order made payable to the EDD.
- Debit card If the funds are still on your card, transfer them to your bank account and then repay them by sending a personal check, cashierâs check, or money order made payable to the EDD.
Include a letter with the following information:
- Name.
- Social Security number or EDD Customer Account Number .
- Week or weeks that the returned payment applies to.
- Reason for returning the benefits.
- Date you returned to work .
- Gross earnings for each week of benefits being returned .
Mail the payment and letter to:
Employment Development Department Overpayment CenterPO Box 66000
Unemployment Extended Benefits Compensation
If you’re eligible for extended unemployment benefits, you will receive the same amount that you received for regular unemployment compensation. The amount of weeks you will receive depends on your state unemployment rate and may vary.
The information contained in this article is not legal advice and is not a substitute for such advice. State and federal laws change frequently, and the information in this article may not reflect your own states laws or the most recent changes to the law.
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Unemployment Extended Benefits Program
The federal government may provide additional benefits to people who have exhausted unemployment benefits. There are additional weeks of federally funded Extended Benefits in states with high unemployment rates.
Unemployed workers are eligible for up to 13 or 20 weeks of additional unemployment benefits, depending on state laws, and the unemployment rate.
These benefits are paid through the state unemployment departments, and eligibility would start when all other benefits are exhausted. If you’re eligible, your state unemployment office will notify you.
Eligibility requirements vary by state, so be sure to check the FAQ section of your state unemployment website for details.
Disadvantages Of Extended Unemployment Benefits
The downside of unemployment benefits is that paying them can, like any other government spending, increase budget deficits and add to the government debt. How can this hurt the economy? Investors may become worried that the government can’t pay back its debt.
Demand falls for U.S. Treasury bonds, which are used to finance government spending. This makes interest rates rise, increasing the cost of borrowing for everyone. Most loans peg their interest rates to the yield on Treasurys.
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Eligibility: Who Qualifies For The Extra $300 Unemployment Benefit
To be eligible for the $300 a week benefit, you need to be receiving unemployment benefits from any of these programs:
- Unemployment compensation, including regular State Unemployment Compensation, Unemployment Compensation for Federal Employees , and Unemployment Compensation for Ex-Service members
- Pandemic Emergency Unemployment Compensation
- Pandemic Unemployment Assistance
- Mixed Earner Unemployment Compensation
- Payments under the Self-Employment Assistance program.
Low-wage, part-time or seasonal workers may fail to qualify for the extra $300.
Million People Is A Lot Of People To Cut Off From Unemployment Insurance All At Once
When the pandemic hit in early 2020, shutdowns meant millions of workers were laid off or furloughed seemingly overnight, and by no fault of their own. Since then, unemployment insurance has made a meaningful difference in helping those people maintain some sort of economic stability, along with other stimulus programs. But expanded unemployment insurance has also been controversial: Many Republicans, business groups, and even some Democrats have argued that its too much and is keeping people out of work. And as the economy has recovered, that argument has only gotten louder as some contingents hold that generous benefits are causing a labor shortage.
It is true that some workers are staying on the sidelines in many parts of the country, it feels like there are Help Wanted signs everywhere, and business owners are complaining about not being able to find employees. But whats not clear is exactly what is causing this its likely a range of factors.
Peter Ganong, a public policy professor at the University of Chicago who has studied the potential disincentive effects of expanded unemployment insurance through the spring of 2021, said that more benefits are having somewhat of an impact, but not a big one. Only a very small fraction of the number of jobs we need to get back to the pre-pandemic level or trend reflect the unemployment insurance disincentive effect, he said.
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How To Collect Extended Unemployment Benefits
How you will collect extended benefits will vary based on your state. In some states, you wont need to do anything. You will automatically be paid for the additional weeks. In others, you may need to apply.
- If you are currently collecting unemployment benefits:Benefits are provided through the state unemployment offices, and information on eligibility will be posted online. If you are eligible, you will be advised on how to collect when your regular unemployment benefits end.
- If you have exhausted unemployment benefits:Long-term unemployed workers who have already exhausted state unemployment benefits may also be eligible for additional weeks of benefits. Check with your state unemployment website for eligibility criteria in your location.
Are The Expanded Unemployment Benefits Enough
One big question remains: Will this round of aid be enough to cushion American workers finances until the job market recovers?
U.S. gross domestic producta major indicator of economic healthis expected to return to pre-pandemic levels by the middle of 2021, according to projections by the nonpartisan Congressional Budget Office. If the employment situation improves drastically over the summer as vaccinations increase and employers can hire with confidence, Congress may not feel a need to pass any further stimulus packages.
If the unemployment rate, which now sits at 6.2%, doesnt bounce back in line with the vaccination rate and overall economic recovery in the U.S., it could create dire circumstances for more than 9 million out-of-work Americans. The U.S. economy had 10 million fewer jobs this January than it did in February 2020, according to analysis by the Center on Budget and Policy Priorities.
The National Employment Law Project, a nonprofit that promotes policies that support workers, was critical of the timeline set by this stimulus package.
The view that everything will be back to normal come September is not only willfully ignorant but also cruel, wrote executive director Rebecca Dixon in a press release. Taking a short-term view to extend benefits, she said, fails to care for people across the country who may still be struggling to secure employment six months from now.
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Income Tax Relief Under The American Rescue Plan Act
The American Rescue Plan Act of 2021 provided additional relief to middle- and lower-income taxpayers by waiving federal income taxes on the first $10,200 of unemployment benefits received in 2020. This relief applied to benefits received through both state and federal unemployment programs for individuals or couples with an adjusted gross income of $150,000 or less in 2020.
Though many states have decided to mirror the federal exemption, CNBC reports that some are offering partial relief while others have decided to tax unemployment benefits. Check with your state tax authority to find out how it plans to treat unemployment benefits in regard to state taxes.
| Outline of Programs in Response to the Coronavirus Pandemic | |||
|---|---|---|---|
| Program | |||
| Extends benefits to self-employed, freelancers, and independent contractors. | Extended PUA to March 14, 2021. | Extended PUA until Sept. 5, 2021. | |
| Federal Pandemic Unemployment Compensation | Provided a federal benefit of $600 per week: Expired July 31, 2020. | Added $300 per week until March 14, 2021. | Extended FPUC until Sept. 5, 2021. |
: H.R. 748, U.S. Department of Labor, H.R. 1319
The Pandemic Emergency Unemployment Compensation , Pandemic Unemployment Assistance , Extended Benefits , $300 Federal Pandemic Unemployment Compensation , and $100 Mixed Earner Unemployment Compensation programs all expired on September 5, 2021.
