What Happens When Federal Unemployment Benefits End This Week

What Happens When Federal Unemployment Benefits End This Week

Sona Sulakian
 | 
More than 25 million Americans are set to lose $600 per week in unemployment benefits this Saturday, July 25 (July 26 for New York), unless Congress acts before then. 

The $600 weekly federal unemployment benefit a part of the over $2 trillion CARES Act passed in March. This $600 was in addition to state unemployment payments.

Those impacted by the ending payments include almost 16 million Americans enrolled in state unemployment programs and about 9 million in the Pandemic Unemployment Assistance program, which covers those usually not eligible for unemployment—business owners, self-employed, gig workers, and contractors.

Women and minorities will be among those most affected. The Congressional Budget Office estimates that almost 47% of those receiving unemployment benefits were non-white. 

On top of all this, the unemployment rate is at 11.1% and many companies have stopped hiring altogether. So it’s not the best time to enter the job market.

Here’s what you need to know before the benefit ends.

Can you get back-pay?

Eligible individuals will receive back-pay for the $600 weekly payments and the state payments, going back to March 29 or the date of their eligibility (whichever is later). 

This is good news for those of you stuck in the backlog of unemployment applications. Many Americans receive this retroactive payment in the form of a lump sum once the application is approved.

Will there be an extension?

Congress is talking  about a second stimulus package. Democrats introduced a bill to extend the federal unemployment benefits and to phase it out after the unemployment rate falls below a set level. 

On the other hand, Republicans want to encourage Americans to return to work, especially since some workers may be earning more with unemployment than by returning to work. Some Republicans have supported a back-to-work bonus.

It seems unlikely that a bill will be passed before the end of July.

Are there any other benefits?

Other provisions of the Pandemic Unemployment Assistance will remain in effect until the end of the year. The extension of unemployment of eligibility to typically ineligible groups, such as gig workers and contractors, will remain in force. So will the additional 39 weeks of unemployment benefits to anyone who is unemployed before the end of the year. 

 

This article is intended to convey generally useful information only and does not constitute legal advice. Any opinions expressed are solely those of the author, not LawChamps.
 
Sona Sulakian

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