Home News That extra $600 unemployment benefit may end sooner than many think

That extra $600 unemployment benefit may end sooner than many think

President Donald Trump discussed a proposed round of federal stimulus aid with House Minority Leader Kevin McCarthy, R-Calif., (left) and Senate Majority Leader Mitch McConnell, R-Ky., (center) in the Oval Office on Monday.

Photo by Doug Mills/Getty Images

Enhanced unemployment benefits are likely ending sooner than many may realize. That could impose financial hardship on millions of families come month’s end. 

The CARES Act, the federal coronavirus relief law enacted in March, gave an extra $600 a week in aid through July 31 to Americans receiving jobless benefits.

But, in all states, that subsidy will end this weekend — on July 25 or 26 — unless Congress passes legislation before then to extend the timeline, which looks increasingly unlikely.

More from Personal Finance:
Unemployment crisis hits big cities hard
Will there be a second $1,200 stimulus check?
Government relief is coming to an abrupt end

“I think people don’t recognize they won’t get the benefit the last week in July,” according to Michele Evermore, a senior policy analyst at the National Employment Law Project, who said many are likely relying on those payments for rent, mortgages and other end-of-month bills.

“I think it’ll come as an unwelcome shock,” she said.

Payments are ending about a week earlier than the CARES Act allows due to the administrative calendar that states use to pay benefits.

States pay aid according to the timeline of a “benefit week.”

All states have benefit weeks ending on a Saturday or Sunday. But July 31 falls on a Friday.

That means states must stop paying the $600 after this weekend in order to comply with the CARES Act, which requires the subsidy to end on or before July 31.  

Around 32 million Americans were collecting unemployment benefits as of June 27, according to most recent data from the U.S. Labor Department.

They would continue to get standard state benefits, which averaged $383 a week in the first quarter this year, according to the Department. That amount would be a roughly 61% decrease in aid. 

‘Tough choices’

Meanwhile, federal lawmakers are debating the contours of another coronavirus relief package.

Democrats have called for an extension of the weekly $600 supplement for jobless workers. Republicans have signaled they want those payments to end.

It’s unclear what, if anything, would take their place if they disappear, but some Republicans have proposed a cash bonus for people who find new jobs or a reduced amount of aid.

Failure to pass legislation by this weekend would effectively mean the $600-a-week unemployment enhancement would lapse.

Every week they don’t get that payments after July 25 or 26 is a week where workers and their families will have to make tough choices.

Ernie Tedeschi

labor economist at Evercore ISI

House Minority Leader Kevin McCarthy, R-Calif., doesn’t expect legislation to pass until the first week of August, he told CNBC on Tuesday.

“Every week they don’t get that payments after July 25 or 26 is a week where workers and their families will have to make tough choices about what spending they’re going to cut, and that will have an effect on the economy and the recovery,” said Ernie Tedeschi, a labor economist at Evercore ISI.

Congress may make any federal unemployment aid included in the next bill retroactive, meaning recipients could receive back pay for weeks going back to the end of July or early August.

However, that could mean Americans must endure a few weeks of financial hardship before being made whole, Tedeschi said.

Read More


Please enter your comment!
Please enter your name here

Most Popular

DHS Secretary Sets the Record Straight on Fake News on Portland Riots

Chad Wolf, acting secretary of the Department of Homeland Security, hit back at a press conference in DHS headquarters in Washington, D.C. on Tuesday against media reports that the Trump administrati…

Trump Raises $20 Million in First-Ever Virtual Fundraiser

President Donald Trump raised an eye-popping $20 million on Tuesday night in his first-ever virtual fundraiser, from a total of more than 300,000 individual donors who participated. This is a great …

ACLU: Constitution Requires Illegal Aliens Count Toward Congressional Apportionment

The American Civil Liberties Union (ACLU), as well as other migration lobbying organizations, claims it is “unconstitutional” not to count illegal aliens when apportioning congressional representatio…

US House poised to vote on reversing Trump’s Muslim ban

The United States House of Representatives is set to vote on Wednesday on legislation reversing President Donald Trump's controversial ban on immigration from Muslim countries. The bill, called the …

Recent Comments

Business and Economic News :: Debtly