Receiving COVID-19 Unemployment Benefits? Three Important Considerations
- Author: Mary Singleton
- Posted: 2024-07-08
If you're unemployed or partially unemployed, chances are that you're familiar with the current state of affairs. Since everything changes so rapidly, here are three important things to keep in mind as you move forward.
The CARES Act Is Still in Effect
Many news outlets falsely reported that the CARES Act expired on July 31, 2020. This is because a key provision of the act expired, formally known as the "FPUC" benefit. This benefit was designed to replace wages fully for most citizens. Also known as the "stimulus" portion of the unemployment money boost, this added $600 to every unemployment weekly payment for everyone, even if they got only $1 in state-level unemployment benefits.
The CARES Act actually has many other provisions that are not set to expire until December 31, 2020. One of the important provisions is "Pandemic Unemployment Assistance" (PUA); the other is "Extended Benefits" (EB). PUA was a response to approximately 40% of American workers being "gig" workers who file a 1099 form at the end of the year, unlike the traditional W-2. These workers have historically not been eligible for employment.
The CARES Act provided that states could use federal funding to pay out the same unemployment benefits to these workers as they did to W-2 workers who had been temporarily furloughed or completely laid off as a result of the pandemic. As long as you have benefit weeks left on your unemployment plan, you should be able to receive PUA money.
This brings us to the next provision that you should know if you're currently relying fully or partially on unemployment benefits.
What "Extended Benefits" Do I Get?
To understand what EB does and why it's so important, you should first know that each state sets its own number of weeks someone is eligible to receive traditional unemployment. The vast majority of states set it at 26 weeks, but there are outliers, such as North Carolina at 12 weeks maximum of unemployment benefits, and Montana at 28 weeks maximum of unemployment benefits.
Once this standard period has expired, provided that you are indeed out of work because of the COVID-19 pandemic, you hit the EB period. In most cases, this is 50% of what the state initially offered. However, in the hardest hit states, it can be up to 75% of the number of weeks added to the total. For example, if you live in a state that already used the normal 26-week system, once you were paid for the twenty-sixth week, you'd have thirteen more weeks of unemployment benefits under the EB provision.
What Is "Lost Wage Assistance"?
"Lost Wage Assistance" (LWA) is a program created by an executive order by President Trump. There has been some confusion surrounding the program due to some miscommunications and the fact that Congress usually holds "power of the purse".
Every state besides South Dakota opted to participate in the program. It is administered through a FEMA grant for which states must apply weekly after a three-week block is given. LWA provides an additional benefit of $300 per week in federal funds, provided an individual receives at least $100 of unemployment compensation already. A few states, like Kentucky and Montana, have announced they will provide the additional $100, but the vast majority of states are only providing funding set aside by President Trump.
Unfortunately, FEMA has already announced that the program is depleted of funds as of September 10, 2020. This does not mean that you won't see these benefits. Starting the week ending in August 1, 2020, there is retroactive back-pay for those eligible for the benefit. Every state that chose to participate has been or is being approved for its sixth and final week of the program.
Given that many states are still fumbling with their computer systems to figure out how to incorporate this novel unemployment benefit enhancement, it's likely that this money will be disbursed over a period of months. Designed as a stop-gap measure due to Congress's stalemate on the issue, it ends up providing at least $1,800 in total of additional unemployment funding to Americans who already receive at least $100 per week.
The Takeaways
In short, there was first the CARES Act, which is still funding core unemployment benefits equal to the state benefit amount. However, the $600 bonus per week provision expired, and LWA was put in its place, providing Americans in every state $300 extra per week of federal funding who already receive at least $100 in unemployment compensation.
