Just as approximately 14 million jobless Americans were to see their unemployment benefits expire, Congress passed a $900 billion economic stimulus package that extends unemployment programs by 11 weeks and boosts weekly payments. After suggesting the new deal did not go far enough, President Donald Trump signed it Dec. 27.
“I think that the bill is a net positive, but 11 weeks is really not much time. But keeping people from falling off a cliff [Dec. 31] is a pretty big deal,“ said Michele Evermore, an unemployment policy analyst at the National Employment Law Project.
This new economic stimulus package — which also includes a host of other relief measures like rental assistance programs, small business aid and $600 stimulus checks — was attached to a mammoth spending bill that kept the government from shutting down.
“I am signing this bill to restore unemployment benefits, stop evictions, provide rental assistance, add money for PPP, return our airline workers back to work, add substantially more money for vaccine distribution, and much more,” Trump said in a statement.
More details will follow in the coming days and weeks, but here’s what you should know now about the changes to unemployment programs.
1. $300 Boosted Weekly Unemployment Payments
The biggest unemployment news in the second stimulus package is the revival of bonus weekly unemployment payments from the federal government.
Federal Pandemic Unemployment Compensation (FPUC) is renewed for $300 per week for a maximum of 12 weeks. The 12-week period begins Dec. 26, 2020, and ends March 14, 2021, for a maximum boost of $3,600.
The recent, intermittent $300 to $400 weekly payments through Trump’s executive order were a separate and more stringent program known as Lost Wages Assistance, which excluded an estimated 1 million jobless Americans.
By contrast, FPUC payments apply to anyone approved for weekly unemployment benefits of at least $1.
2. More Pandemic Unemployment Assistance
Pandemic Unemployment Assistance (PUA) has been a lifeline for gig workers and independent contractors who don’t typically qualify for state-level Unemployment Insurance programs.
The novel program, created through the CARES Act in March 2020, provides out-of-work folks with federal unemployment benefits equal to half their state’s average Unemployment Insurance payment.
Minimum weekly PUA payments range from about $90 to $224, depending on where you live.
The CARES Act authorized these payments for a maximum of 39 weeks initially. New legislation extends PUA to 50 weeks total. The program now sunsets on March 14, 2021. Those who haven’t exhausted their PUA benefits as of March 14, 2021, may continue receiving benefits until April 5, 2021.
One new and notable limitation: PUA used to be available retroactively from January 2020. The new law changes that, tightening the window for retroactive PUA payments between Dec. 1, 2020, and March 14, 2021.
3. Lengthened Unemployment Insurance Extensions
Pandemic notwithstanding, most state-level Unemployment Insurance (UI) programs last about 26 weeks, though that number varies by state from 12 to 30 weeks.
The first stimulus package created a federal 13-week UI extension program, known as Pandemic Emergency Unemployment Compensation (PEUC). Essentially, once you’ve exhausted your state’s UI program, PEUC allows you to continue your UI benefits for 13 more weeks. The main difference is that the federal government picks up the tab instead of your state.
The second stimulus package expands PEUC further. The federal extension now lasts a total of 24 weeks — in other words, an additional 11 weeks were tacked on to the existing PEUC program.
After all 24 weeks of the PEUC extension are exhausted, you may be eligible to extend your UI benefits for a maximum of 20 weeks through additional state-level Extended Benefits programs.
PUA recipients are not eligible for this federal extension program.
4. Overpaid Benefits Waiver
Because of the devastating and wide-reaching economic impact of the pandemic, state labor departments the country over were slammed with an unprecedented amount of unemployment claims — oftentimes for brand new programs.
Application issues, website crashes and payment delays were (and still are) widespread.
To get the new programs running and payments out as fast as possible, several states underpaid PUA benefits, according to a recent report from the Government Accountability Office, a congressional watchdog agency.
Unfortunately, many states also overpaid folks out of error, and those people were on the hook for that extra money. The new stimulus package now gives states the ability to waive overpayment requests for two federal programs: Pandemic Unemployment Assistance and Lost Wages Assistance.
Previously, states were unable to waive overpayment requests even if they were at fault for the issue, meaning you may have been required to pay back money that had long been spent.
According to unemployment experts, state unemployment agencies will once again be thrown into a scramble in the coming weeks as they roll out these new stimulus provisions.
“States will be asked to implement a significant number of new rules for these programs for a law that will only last eleven weeks. In reality, many workers won’t receive the benefits until well into this short period — and at that point, the states will be forced to cut it off once again,” wrote Andrew Stettner, an unemployment policy analyst at The Century Foundation.
This was originally published on The Penny Hoarder, a personal finance website that empowers millions of readers nationwide to make smart decisions with their money through actionable and inspirational advice, and resources about how to make, save and manage money.