$ 300 unemployment benefit ends next week. Will federal benefits be reintroduced? What you should know

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Federal funding for the extended unemployment benefit ends on Labor Day.

Sarah Tew / CNET

Expanded Unemployment Benefits, which includes $ 300 weekly bonus checks and coverage for the freelance and long-term unemployed, is nearing its formal expiration date, with many being canceled on September 4th. Over 11 million people will be affected, around 7.5 million of whom will lose benefits completely. About two dozen states had decided to pull the plug on federal aid that summer, with governors claiming that supplemental unemployment insurance was preventing residents from taking available jobs.

Unemployed residents in at least 12 states, most recently in Florida, have taken legal action to try to reinstate this pandemic aid on the grounds that they were unable to pay basic expenses, including rent. With unemployment claims still fluctuating as the economy struggles to return to “normal” pre-pandemic conditions, reports show that the premature cancellation of federal programs had little impact on labor markets. Meanwhile the upward trend in new Delta variant COVID-19 Cases could mean new quarantine restrictions and, consequently, more layoffs.

Who will lose on Labor Day this year and who will be hardest hit? Will the improved pandemic benefits ever be restored? What can people do when they need unemployment insurance to make ends meet? We’ll explain it below. You may also want to know how the IRS issues refunds to those who have been taxed on their unemployment benefit in 2020. And here’s an important introduction to the 2021 Enhanced Child tax deductionthat will provide millions of families with extra pre-tax cash for the next year.

Which federal unemployment programs end next week?

Right at the beginning of the pandemic, the CARES Act of March 2020 introduced new, temporary federal unemployment assistance programs. The first was Federal pandemic unemployment benefits (FPUC), the weekly bonus – initially $ 600 a week and later $ 300 a week – that helped unemployed Americans top up their benefits and get back some of their lost wages. The other was Pandemic unemployment benefits (PUA), which covered self-employed and freelancers who are normally not eligible for allowance. Another was Pandemic Emergency Unemployment Compensation (PEUC), which granted aid to those who had exhausted their state’s performance period (usually 26 weeks).

A later stimulus package created another program called the Unemployment benefit for mixed earners (MEUC), which offered workers whose work was split between salaried employees and independent contractors an additional $ 100 per week.

The American rescue plan in March 2021 extended these four programs through Labor Day, which is still the formal expiration date. Since September 6th falls on a Monday, some recipients can only claim them until September 4th. There is no grace period.

How many people lose unemployment benefits at the beginning of September?

It affects more than 3 million people who receive the weekly bonus on their state unemployment benefit through the FPUC. If they are still eligible for state unemployment insurance (if they have not reached their maximum duration), they will continue to receive compensation after Labor Day, but they will lose the $ 300 weekly allowance.

In addition, around 7.5 million people will be completely cut off from aid after the temporary pandemic unemployment programs come to an end. This is considered to be the largest cut in unemployment benefits in US history. This is how it breaks down after a detailed analysis of Labor Department data by the Century Foundation.

  • 4.2 million people affected by PUA: This category includes workers who are not eligible for state or state unemployment benefits. It includes freelancers, gig workers, independent contractors, and part-time workers. During the pandemic, the program also provided assistance to those who could not work because they were caring for a loved one.
  • 3.3 million people covered by PEUC: This category includes workers who would no longer have been entitled to unemployment because they exceeded the benefit window of their state (most offer 26 weeks, some even 12 weeks and others even 30 weeks). The program provided up to 53 weeks of additional assistance to those who exceeded state aid.

That is not the complete picture of all unemployed people. Reported unemployment rates generally do not take into account those who have left working life completely and are no longer considered to be jobseekers, such as the long-term unemployed. Those who are severely disadvantaged are workers in frontline industries, especially black workers, whose current unemployment rate is around 10%. Women were also particularly affected by job losses caused by COVID (PDF) and were heavily responsible for looking after children or family members during the pandemic.


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Which states canceled federal benefits prematurely and where were they reinstated?

Citing labor shortages, 26 state governors said that pandemic-related unemployment benefits are creating limited incentives for workers to take jobs. Many economists and analysts disagreed, highlighting that several factors have prevented people from finding suitable work, including low wages, lack of childcare and fear of contracting COVID-19.

According to an August report by Andrew Stettner of the Century Foundation, “Politics, not economy, drove the attack on unemployment insurance.” A recent study by the JP Morgan Chase Institute (PDF) confirmed that states that terminated additional unemployment insurance programs prematurely showed little evidence that their labor markets improved thereafter.

The states that cut off increased benefits in June and July prior to the federal phasing out were Alabama, Alaska, Arizona, Florida, Georgia, Idaho, Iowa, Louisiana, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, West Virginia, and Wyoming.

Arkansas, Indiana, and Maryland were due to end benefits early, but successful lawsuits forced these states to maintain state coverage, at least temporarily. In their judgments, the judges found that the abolition of benefits made it more difficult for the unemployed to receive basic services. Lawsuits have been filed against state governors elsewhere, such as Florida, Oklahoma, and Tennessee, but those cases are still on trial. Similar lawsuits seeking aid recovery in Louisiana, Ohio and West Virginia have been denied by judges.

Some states, including Arizona, Montana, and New Hampshire, have started providing financial incentives for individuals to find work. Other statessuch as Colorado and Connecticut continued the unemployment programs but offered their own bonuses for new jobs. Because every state has different requirements, check to see if there are any signing bonuses where you live.

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With the economy still recovering, the end of the pandemic unemployment can feel like a trap for millions with no income.

Sarah Tew / CNET

Could the increased unemployment benefit be extended again?

White House officials have announced that they will discontinue the increased unemployment benefits last September as they were meant to be temporary. As states began to pull out of pandemic-era unemployment programs, Labor Department officials said their hands were tied and they could not object to governors’ decisions.

States can use $ 350 billion in pandemic funds that Congress allocated in the US bailout to continue paying unemployed workers, according to an Aug. 19 letter from officials at the Department of Labor and Treasury. The letter states that in areas where unemployment remains high, “it may make sense for unemployed workers to receive additional support over a longer period” that would enable them to find a job . It is not currently clear which states will choose to use leftover pandemic funds to continue unemployment benefits.

How can you apply for unemployment insurance?

If you have been made redundant or have been on leave, you can apply for unemployment benefit in your state. Once the state approves your application, you can apply for any state benefits to which you are entitled. With states covering 30 to 50% of a person’s wages, there isn’t a single amount to expect at the national level. Each state’s unemployment insurance office will provide information to help you submit an application to the program in the state where you worked. Some claims can be made in person, over the phone, or online, so it is best to contact your state’s office directly.

The eligibility criteria vary from state to state, but the general rule is that you should apply if you’ve lost your job or been made redundant through no fault of your own, including directly or indirectly due to the pandemic. Here you can find out about the requirements of your state. In February, the Department of Labor updated its unemployment eligibility requirements to include people who refused to return to work due to unsafe coronavirus standards.

As for self-employed and freelancers losing PUA coverage, some online groups are calling for pandemic unemployment programs to be expanded during the crisis and more information to be provided.

We’ll keep updating this story as we get more information.

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