President Donald Trump in the Cabinet Room of the White House on Aug. 3.
Doug Mills-Pool/Getty Images)
President Donald Trump signed a measure on Saturday to boost unemployment pay by up to $400 a week.
That could help millions of jobless Americans pay their bills at a time when job prospects are slim and prior relief — an extra $600 a week from the federal government — ended last month.
There are around 28 million people collecting unemployment benefits, according to the Labor Department. Absent additional aid, some are getting as little as $5 a week.
But there’s still much we don’t know about the new benefit.
Important details — like the amount and duration of extra aid, as well as when it will start — are in flux, according to labor experts.
“There are just big question marks and a lot of unknowns right now,” said Arindrajit Dube, an economics professor at the University of Massachusetts Amherst.
Here’s what we know — and don’t know — so far.
Workers collecting regular state unemployment benefits are eligible for the extra money.
Those getting aid through the following programs are also eligible:
- Pandemic Unemployment Assistance
- Pandemic Emergency Unemployment Compensation
- Extended Benefits
- Short-Time Compensation
- Unemployment Compensation for Federal Employees
- Unemployment Compensation for Ex-Service members
- Trade Readjustment Allowances
- Self-Employment Assistance
Who’s left out?
There’s a big caveat to this list, though.
Workers must get at least $100 a week in unemployment benefits to be eligible for the additional jobless aid.
A large share of people collecting unemployment benefits — about 1 million or more, by some estimates — fall below that threshold and wouldn’t be eligible for the additional assistance.
That workers can be getting less than $100 a week is a function of state unemployment law. All states set minimum weekly benefit levels, and most set a floor below $100 a week.
People receiving Disaster Unemployment Assistance or State Additional Benefits also aren’t eligible.
Some states may opt not to offer the benefit. Governors from states such as California, Delaware, Florida, Kentucky, Mississippi, New Jersey and New York this week expressed hesitation, due to cost, legal or administrative reasons. Of course, they may ultimately change their minds and decide to move forward.
Trump’s memo was widely billed as a $400 weekly boost to unemployment benefits in recent days.
In truth, recipients are likely to get just $300 a week from the federal government.
States are supposed to kick in an extra $100 a week (on top of the federal government’s $300 subsidy) as part of a cost-sharing requirement — but that amount isn’t guaranteed.
In fact, it’s unlikely that states will pay that “match,” experts said.
If a state already pays $100 a week to a recipient of unemployment benefits, the state can count that aid as its “match” and wouldn’t have to pay out any additional funds. This person would get the federal $300 subsidy and nothing else from the state.
States that wish to offer an extra $100 would have to fund it using aid allocated through the Coronavirus Relief Fund — created by the CARES Act, a relief law enacted in March — or an alternative source.
Neither is likely, according to Andrew Stettner, an unemployment expert and senior fellow at The Century Foundation.
About 25% of the money in the Relief Fund had been spent as of June 30, and states may have already allocated a large share of the remainder to future costs, according to the Committee for a Responsible Federal Budget.
Plus, many states are already borrowing from the federal government to cover current unemployment obligations.
“It’s really hard to imagine states will voluntarily pay $100 extra,” Dube said.
How long will it last?
Recipients would get back pay dating to the week ended Aug. 1 — the same week that the extra $600-a-week supplement lapsed.
But the end date isn’t entirely clear.
The aid is scheduled to end Dec. 27 this year, according to a Labor Department memo issued Wednesday.
However, it may stop earlier under a few circumstances.
The federal government is allocating up to $44 billion from the Disaster Relief Fund, overseen by the Federal Emergency Management Agency, for the extra unemployment benefits.
The unemployment benefits will stop once that money runs out. By some estimates, the program would provide as little as five or six weeks of benefits.
The aid would also end if the Disaster Relief Fund — which FEMA draws down to offer financial assistance in the event of weather disasters and other emergencies — coffers dip to $25 billion or less.
The fund had a $74 billion balance at the beginning of August, according to FEMA.
The aid may also end early if Congress passes — and the president signs — legislation to reinstate a federal unemployment supplement. Negotiations on additional aid are currently stalled without a deal in sight.
When will it start?
This also isn’t clear.
On Tuesday, White House economic advisor Larry Kudlow estimated people would start receiving payments in around two weeks.
Some experts believe it may be much longer, perhaps more than a month.
There are many factors at play.
Primarily, there are administrative challenges for states.
Paying the aid isn’t as simple as toggling a computer button on or off or plugging the number “300” into an unemployment system to increase payments, experts said.
The new benefit isn’t technically “unemployment insurance.” It’s something new, called “lost wages assistance.”
It may not seem it, but this is a significant detail. It means states will have to build a totally new system that interacts with its current unemployment framework to pay out the benefit.
States still have to interpret program rules to determine how to implement the benefit and move forward. The Labor Department just issued guidance on the program Wednesday night for states.