President Donald Trump on Saturday authorized an additional $ 400 in weekly benefits for unemployment insurance, a potential financial lifeline for the nation of 16.3 million unemployed. However, while his memorandum makes those payments retroactive until August 1, the money can take weeks to reach people and amounts to less than advertised for some claimants.
Mr. Trump’s efforts to partially recover the additional benefits, which expired last month, means states have to put in place new systems to administer the benefits, which can take a lot of time to accumulate, according to unemployment experts. The result: Unemployed workers would not have to count on the extra benefits in their bank accounts for the next few weeks.
Some states may also not have the funding to provide 25% of the benefit, as proposed. That could see the support rise to $ 300 a week, half of the extra weekly pay workers received by the end of July through the CARES Act.
Certainly, any additional financial aid would help the millions of Americans who have lost their jobs and struggle to find new employment. But the complexity of the unemployment system – combined with the political and legal uncertainties surrounding the end of Mr. Trump after Congress last week disagreed on a new incentive package – have raised a series of questions about the White House initiative.
“That’s the tragedy – workers expect to get this because the president has promised it to them,” said Michelle Evermore, senior policy analyst at the National Employment Law Project, an advocacy group. “It will be a real challenge for states to say they can get this done.”
States would likely have to introduce new systems for administering aid, as the federal portion will come from $ 44 billion in funds allocated for relief from natural disasters. States cannot use their current unemployment systems for benefits authorized outside Congress, NELP notes.
Here’s what you need to know differently about Mr. Trump to start attempting to truncate additional unemployment benefits to Americans:
When do I get the extra $ 400?
Don’t expect to receive the extra unemployment benefit this month, said Andrew Stettner, senior fellow at The Century Foundation, a progressive think tank. Because states would have to build a new system to manage the money, they might not be able to distribute the funds until September, he said.
“We are lucky if someone gets this money in August,” Stettner said. “It’s more likely in early September.”
Already, some unemployed workers are posting questions on social media about when they can get the extra help, pointing to Mr. Trump’s memo stating that it will start on August 1 for those who qualify. Instead, unemployed Americans are likely to receive refunds that go back to Aug. 1 when the program launches, Stettner said.
How long will the $ 400 payments last?
Mr Trump’s plan would fund the additional unemployment benefits by raising $ 44 billion from the Nation Disaster Relief Fund. That’s enough for four or five weeks, according to Raymond James analyst Ed Mills.
What happens if my state is unable to provide funding?
This is one of the biggest questions regarding Trump’s directive, which states that the federal government will provide $ 300 in additional aid and the states will contribute another $ 100.
Some executives have already said the $ 100 per person contribution is out of reach, with Gov. Andrew Cuomo of New York calling it “impossible.” This is because many states are already financially penalized for a loss of tax revenue after the coronavirus pandemic shook the economy.
Trump’s mandate states that the state’s funding would come from the $ 150 billion Coronavirus Relief Fund (CRF), but some states have already spent or earmarked that money.
“For many states, the remaining funds in the CRF would be enough to pay off the state share of benefits,” Goldman analysts wrote in a research note. “However, some states have already used most, or, in the case of California, all of their CRF allocation, which would allow them to fund the benefit of other state resources.”
States have another option, according to a Sunday memo from the Department of Labor reviewed by CBS MoneyWatch. They can “count their existing unemployment insurance (UI) weekly benefit payments from state funds” to their $ 100 contribution, the memo said.
“It appears if you get stateless benefits that are at least $ 100, you would have to get $ 300 up, even if your state can’t raise the extra $ 100,” Stettner said.
In effect, workers in those states will receive only an extra $ 300 on top of their regular unemployment benefits, instead of the expected $ 400, he noted.
Who is not eligible for the additional benefits?
Unemployed workers who receive less than $ 100 a week in unemployment benefits are not eligible for the additional $ 400 in support authorized by Mr. Trump.
That draws criticism from experts who say it will hurt workers who need the most help – low-paid workers like waiters and gig-economy workers who may not be eligible for higher unemployment benefits.
“It affects those at the bottom of the income spectrum, like in the gig economy,” Stettner said. “They have the least to prevent – and will get nothing.”
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