President Donald Trump discussed a proposal for a federal stimulus aid round with House Minority Leader Kevin McCarthy, Republican of California (left) and Senate Majority Leader Mitch McConnell, Republican of Kentucky, (center) in the Oval Office on Monday.
Photo by Doug Mills / Getty Images
Improved unemployment benefits are likely to end sooner than many believe. That could impose financial difficulties on millions of families by the end of the month.
The CARES Act, the federal coronavirus relief law enacted in March, provided an additional $ 600 per week in aid through July 31 to Americans receiving unemployment benefits.
But in all states, that subsidy will end this weekend, July 25 or 26, unless Congress passes legislation before that date to extend the term, which seems 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 that they won’t get the benefit the last week of July,” according to Michele Evermore, senior policy analyst for the National Labor Law Project, who said many are likely to depend on those payments for rent, mortgages and other end of month bills.
“I think it will be an unpleasant surprise,” he said.
Payments end approximately one week earlier than the CARES Act allows due to the administrative calendar states use to pay benefits.
States pay aid according to a “benefit week” schedule.
All states have benefit weeks that end on Saturday or Sunday. But July 31 falls on a Friday.
That means states must stop paying the $ 600 after this weekend to comply with the CARES Act, which requires the subsidy to end on or before July 31.
About 32 million Americans were collecting unemployment benefits as of June 27, according to the latest data from the United States Department of Labor.
They would continue to earn standard state benefits, which averaged $ 383 per week in the first quarter of this year, according to the Department. That amount would be a decrease of about 61% in aid.
‘Difficult options’
Meanwhile, federal lawmakers are debating the outlines of another coronavirus relief package.
Democrats have called for an extension of the $ 600 weekly supplement for unemployed 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.
If the legislation is not passed this weekend, it would mean that the $ 600 a week unemployment boost would expire.
Every week they don’t get those payments after July 25 or 26 is a week when workers and their families will have to make tough decisions.
Ernie tedeschi
economista laboral at Evercore ISI
House of Representatives minority leader Kevin McCarthy, R-Calif., Does not expect the legislation to pass until the first week of August, he told CNBC on Tuesday.
“Every week they don’t get those payments after July 25 or 26 is a week where workers and their families will have to make tough decisions about what spending they are 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 can make any federal unemployment aid included in the next bill retroactive, meaning beneficiaries could be overdue for weeks from late July to early August.
However, that could mean Americans must endure a few weeks of financial hardship before recovering, Tedeschi said.
.
