At Least 20 States Start Paying The Extra $300 Weekly Unemployment Benefit

At least 20 states have begun issuing a $300 weekly supplement to unemployment benefits, after a slow rollout that has left millions of Americans without additional aid for more than a month.

The subsidy to jobless benefits is part of a Lost Wages Assistance program the Trump administration created Aug. 8 by executive fiat.

It diverts up to $44 billion in federal disaster-relief funds to unemployed workers, coming on top of state unemployment benefits, which replace about half of prior pay for the typical worker.

The 20 states represent fewer than half of the 49 states that applied to the federal government for the aid.

Those states are: Alabama, Arizona, Arkansas, California, Florida, Idaho, Iowa, Louisiana, Massachusetts, Minnesota, Michigan, Missouri, Montana, New Hampshire, New Mexico, North Carolina, Rhode Island, Tennessee, Texas and Utah. (Montana is kicking in an extra $100 a week, so workers will get $400.)

South Dakota is the only state that didn’t apply for the assistance.

States will get up to six weeks’ worth of Lost Wages Assistance money from the Federal Emergency Management Agency, which is overseeing the program, an agency spokeswoman said Thursday. States received an initial allotment of three weeks and must then apply for additional weeks. Many states have been approved for some additional weeks, while some haven’t yet.

A full six weeks of funding would supply a total $1,800 for workers unemployed from the week ended Aug. 1 to the week ended Sep. 5.

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Funding is estimated to last for about five weeks. Hundreds of thousands of workers are ineligible for the subsidy due to program rules limiting the cash to those currently getting at least $100 a week in unemployment benefits.

Unemployment elevated
The federal aid comes amid the worst period of job loss since the Great Depression, as the coronavirus pandemic pushed state officials to shutter broad swaths of the economy in the spring.

Nearly 30 million Americans are collecting unemployment benefits, compared with about 1.6 million at this time last year, according to the Labor Department.

The U.S. unemployment rate recovered to 8.4% in August from its 14.7% April peak, but remains higher than the peak of most recessions after World War II.

Chart showing U.S. unemployment rate through August 2020.
Around 1.7 million workers filed new applications for jobless benefits last week (between state unemployment insurance and the Pandemic Unemployment Assistance program). That figure has increased over the past two consecutive weeks, pointing to continued and historically elevated job loss six months into the crisis.

It’s been about a month and a half since unemployed workers received a $600 weekly supplement to benefits, which lapsed at the end of July. That subsidy had been part of the CARES Act enacted in late March, and Congress has been unable to reach a deal to replace it with another weekly enhancement.

In the absence of a federal subsidy, workers have been left with just their state-allotted benefits. States paid $306 a week in July, on average, according to Labor Department data.

Delay in Lost Wages Assistance
Workers receiving benefits in states that have started paying out Lost Wages Assistance won’t necessarily get their payment right away.

States can only disburse funds to workers who have self-certified they’re unemployed or partially unemployed due to disruptions from Covid-19.

Since that sort of certification was already a requirement to get Pandemic Unemployment Assistance, some states appear to be doling out aid to PUA recipients more quickly than those getting traditional unemployment insurance.

Massachusetts, for example, started paying the $300 weekly subsidy to PUA recipients on Sept. 2. Those getting state unemployment insurance won’t see payments hit their bank accounts until around Sep. 15, according to the Department of Unemployment Assistance.

Other factors could delay payment for days or weeks, too. In Florida, workers who receive benefits via debit card instead of direct deposit will have a paper check mailed to them, according to the Department of Economic Opportunity. Such workers should verify their mailing address record is correct, the agency said.

– CNBC