If you’re one of the 40 million Americans who has filed for unemployment benefits, your $600 a week benefit may not be extended.
Here’s what you need to know.
Will Unemployment Benefits Be Extended?
This week, another 2.1 million Americans filed for unemployment benefits, bringing the total to more than 40 million Americans who are unemployed due to the COVID-19 pandemic. In addition to regular unemployment benefits, the CARES Act – the $2.2 trillion financial stimulus package – provides supplemental employment benefits of $600 a week that are scheduled to expire on July 31, 2020. Will they be extended? House Democrats passed the Heroes Act, a new stimulus bill that would extend additional unemployment benefits.
However, not everyone supports the extension. For example, business groups such as the U.S. Chamber of Commerce want their members to open their businesses with furloughed employees and new hires. Their concern is this: extending unemployment benefits may provide a disincentive to return to work, which also can create a longer-term unemployment issue. So, they are asking Congress to consider an alternative to more unemployment benefits, including even a financial bonus for workers to return to work. Senate Majority Leader Mitch McConnell (R-KY) has already said that Senate Republicans will not support extending the $600 a week unemployment benefits.
How much unemployment can I get?
In most cases, when you lose your job, you can receive unemployment benefits up to half of your wages, subject to a maximum benefit. Each state sets its own eligibility criteria and unemployment benefit levels. In most states, you are paid weekly, and you receive unemployment benefits from the state in which you last worked. Unemployment benefits typically last for 26 weeks. However, each state dictates the length of unemployment benefits. For example, states such as New York, California, Texas, Pennsylvania, Minnesota and Ohio each offer 26 weeks of unemployment benefits through the traditional state-funded unemployment insurance system. Seven states provides less than 26 weeks of unemployment compensation. For example, Florida and North Carolina each offer 12 weeks, while Missouri provides 13 weeks of unemployment benefits.
Under the CARES Act, you can receive an additional 13 weeks of unemployment benefits. These benefits, which can help provide you with a total of 39 weeks of unemployment in most states, are called Pandemic Emergency Unemployment Compensation (PEUC) benefits. If your state provides less than 39 weeks of unemployment benefits, you can receive the difference through Pandemic Unemployment Assistance (PUA). Through July 31, 2020, you also can receive $600 each week in addition to the weekly unemployment benefits starting from the date you lose your job. These unemployment benefits are also subject to income tax at your ordinary income tax rate and will be added to your gross income.
What is a “return to work” bonus?
A “return to work” bonus would pay someone who is unemployed a financial bonus to get a job or return to their job if they are furloughed. As an alternative to extending unemployment benefits, Sen. Rob Portman (R-OH) proposed a return to work bonus that would work like this:
- Receive a $450 weekly bonus if you return to work before July 31, 2020.
- So, you could earn your regular wages plus $450 a week, if you are employed.
- Anyone unemployed would still receive the $600 a week unemployment benefits through July 31, 2020.
Democrats want to extend unemployment benefits
Many Democrats want to extend unemployment benefits. Sen. Ron Wyden (D-OR) has a plan to extend unemployment benefits. Among other provisions, Wyden’s plan would:
- Extend $600 a week unemployment benefits (also known as Federal Pandemic Unemployment Compensation) beyond July 31, 2020.
- After July 31, 2020, the amount of benefits would remain at $600 a week for all weeks until a state’s three-month average total unemployment rate falls below 11%.
- Unemployment > 10%: $500 a week
- Unemployment > 9%: $400 a week
- Unemployment > 8%: $300 a week
- Unemployment > 7%: $200 a week
- Unemployment > 6%: $100 a week
Wyden’s plan also would extend Pandemic Emergency Unemployment Compensation (PEUC) – the additional 13 weeks of unemployment benefits – based on a state’s level of unemployment. For example, if a state’s unemployment rate is more than 8.5%, you could receive 52 weeks of PEUC, which means you could receive a total of 78 weeks of unemployment compensation in most states.
Stay tuned for whether your unemployment benefits will be extended. Will you receive a return to work bonus? The next stimulus bill may have the answers.
Source: Forbes – Money