A $300-a-week federal boost to unemployment benefits may end shortly after it starts.
In some states, recipients may only get three weeks’ worth of payments — if they get it at all.
The enhancement to jobless aid, authorized by President Donald Trump in a recent executive measure, is available in states approved for funding by the Federal Emergency Management Agency, which is disbursing the relief.
The extra $300 a week, to be paid as part of a new “lost wages assistance” program, comes after a $600-a-week federal unemployment supplement enacted by Congress lapsed at the end of July. It had been in place since April.
Without additional federal assistance, unemployed workers are getting $308 a week in state benefits, on average, according to the Labor Department. For many, this isn’t enough to cover basic living expenses. Some are getting just $5 a week.
Three weeks of funding
States applying for the federal grants will receive an “initial obligation of three weeks of needed funding,” according to a recent memo issued by FEMA about the relief.
The agency will then make allotments to states on a week-by-week basis “in order to ensure that funding remains available for the states who apply for the grant assistance,” according to the memo.
The policy amounts to a guarantee of just three weeks of federal funding for the unemployment subsidy, said Michele Evermore, a senior policy analyst at the National Employment Law Project. FEMA and the White House didn’t immediately respond to a request for comment.
Recipients in early-mover states could ultimately receive aid over a longer period than those in slower-moving states, Evermore said.
‘Unfair’
To date, just a handful of states have been approved or applied for the funding.
Arizona, Iowa, Louisiana and New Mexico were the first states approved to receive the grants, according to a FEMA announcement on Saturday.
Some other states, like Colorado, have applied for the funding but haven’t yet received approval.
The Department of Labor estimates states will take an average of three weeks, from Aug. 8, to start paying eligible recipients, according to the FEMA memo. Experts expect it to take much longer in certain states. Unemployed workers in Arizona may get payments as early as this week, though, according to reports.
Meanwhile, South Dakota will not offer the additional $300 relief to unemployed workers, according to Gov. Kristi Noem, who said the state is in “the fortunate position of not needing to accept it.”
Nearly 19,000 people are collecting unemployment benefits in South Dakota, between its traditional unemployment program and the federal Pandemic Unemployment Assistance program for the self-employed, gig and other workers. Its insured unemployment rate — the number of workers getting jobless benefits as a percentage of its labor force — is 3.7%, the second-lowest in the nation behind Idaho. (The U.S. average is around 11%.)
“Some people will be made better off [from the $300 federal aid], and that’s a good thing,” Evermore said. “But it’s not equal.
“Some states will be able to do this and some states won’t,” she added. “I really think that’s unfair.”
More than 28 million Americans were collecting unemployment benefits at the end of July, according to the Labor Department.
The unemployment rate, at 10.2%, still exceeds the Great Recession’s peak jobless rate, even after more than 9 million Americans have returned to work since May.
Trump originally billed the federal unemployment boost as a $400 subsidy. However, most recipients will likely only get $300 a week instead. That’s because states would have to opt to kick in the extra $100 a week.
The subsidy is scheduled to last until Dec. 27 or until the $44 billion allocated to the program runs out.
Initial estimates suggested aid will flow for about five or six weeks.
But an active hurricane season could also limit overall aid received by states, Evermore said. The unemployment subsidy is being funded from the same disaster-relief fund FEMA taps in the event of weather disasters and other emergencies. Unemployment aid will cease if that fund dips below $25 billion.
Recipients will get the payments dating back to the week ended Aug. 1.
However, about 1 million people collecting jobless benefits won’t be eligible for the $300 supplement. That’s due to a restriction limiting aid to those currently getting more than $100 a week in unemployment benefits.
CNBC