$400 Unemployment Insurance Benefit: Who Qualifies, and When Does It Start?

More than 30 million unemployed Americans were receiving an additional $600 in unemployment benefits until they expired on July 25. If you are one of them, you were probably somewhat relieved to have heard that last weekend, President Donald Trump signed an executive measure that promises $400 a week on top of your state’s regular unemployment benefits.

Of course, $400 isn’t $600, but it isn’t zero dollars either.

Naturally, you likely have questions. Read on for detailed answers to some of the more common concerns surrounding this benefit.

[See: 35 Ways to Save Money.]

Is it a certainty that I’ll receive an extra $400 a week in unemployment benefits?

Nobody really knows for sure, although it does seem likely that you’ll at least receive $300 a week. But this is an educated guess. There are 50 different states, after all, and there’s really no telling how states will handle this.

Part of the problem is that the way the executive measure is set up, it requires states to pony up $100 of that $400. If your state will pay unemployed residents $100 extra a week, the federal government will pay an additional $300 on top of that, and so that’s how you get $400.

The issue is that many states are facing budget shortfalls due to the pandemic, so offering an extra $100 to unemployed citizens would make things even tighter.

“Some governors are already pushing back, says Colleen McCarty, a labor and employment attorney at Fox Rothschild LLP, a national law firm with headquarters in Philadelphia. McCarty is based out of Las Vegas.

McCarty says governors are irked that not only do they have to chip in 25% of that $400, they have to set up a separate program to provide the extra benefit. “For states that are already cash-strapped and struggling to manage their jobless claims, the additional burden may be a total nonstarter,” McCarty says.

In recent days, however, the Labor Department has given states a loophole. They can count $100 of their regular state unemployment benefits that they’re already paying as their 25%. So it’s expected that many states struggling with budgets will take that loophole, and you’ll actually receive $300 in enhanced unemployment benefits.

So instead of $600 in enhanced unemployment benefits, I would receive half of that?


What if I’m a part-time employee or contract worker, and I was getting unemployment. Is this $300 or possibly $400 extra a week for me as well?

Maybe. It’s a little unclear. If you’re eligible for the Pandemic Emergency Unemployment Compensation or Pandemic Unemployment Assistance through the Coronavirus Aid, Relief , and Economic Security Act, which was part of the $2.2 trillion stimulus package signed into law earlier this year, technically, you are eligible for this.

However, the PEUC and PUA are federal programs. If your state doesn’t chip in $100 toward this $400, you may end up not receiving the extra $300.

And there is another loophole that could hurt you. The executive measure won’t give extra money to people who are receiving less than $100 a week in unemployment state benefits. That could leave out some low-wage or part-time workers who are receiving state unemployment benefits but under $100 a week. It’s been suggested that as many as 1 million workers may fall into that category.

You mentioned that states have to set up a separate program to disperse the unemployment benefits. So this new addition of $300 or $400 a week isn’t an extension of the unemployment benefits I was receiving?

In spirit, maybe, but in execution, no. The $600 extra a week was part of the CARES Act, which was signed into law due to the pandemic. If you do end up receiving $300 or $400 a week (again, on top of your state unemployment benefits), the federal government’s portion of $300 a week will be pulled from a $44 billion disaster relief fund being held by the Federal Emergency Management Agency, which is within the Department of Homeland Security.

This has created at least one problem aside from raiding some of the money meant for natural disaster relief. Since these additional unemployment benefits are not an extension of the already existing unemployment benefits program, it means, as McCarty observed, states have to set up an entirely new system to disperse the funds. That can take time.

[Read: The $600 Unemployment Insurance Boost Is Expiring: Here’s What to Know.]

How much time? If I do receive the $300 or $400 extra in unemployment benefits, how long might it take it to be all worked out? In other words, when will I see this extra money?

If you’re an optimist, you’ll be encouraged by Treasury Secretary Steven Mnuchin, who told the media on Aug. 10 that states should be able to “execute” the additional federal unemployment benefits within two weeks. That would suggest you might see it by Aug. 24.

Several governors, on both sides of the political spectrum, suggested it would take longer or even never (one governor called it “not workable,” and another said “it would be challenging and would take some time”), but that was before the Labor Department came up with its loophole. So hopefully it’ll be around Aug. 24 or during that week — but it would be risky to count on that.

So the additional money will probably be half of what it was, and it may take time to get it. Is there any good news involving these enhanced unemployment benefits?

As a matter of fact, yes. The enhanced benefits are retroactive to Aug. 1. So if you don’t receive the additional benefits until late August or early September or whenever, you will receive all of the money you should have received from Aug. 1 onward. So it should be a decent cushion of cash coming, which would be more exciting, of course, if you didn’t already have a lot of unpaid bills and late fees to spend the money on.

[See: 15 Money-Saving Tips for Big Families.]

Assuming the $300 or $400 extra in unemployment benefits does come, at least it will help the economy, right?

It will , but maybe not as much as one would hope. Julie Smith, a professor of economics at Lafayette College in Easton, Pennsylvania, says the unemployment benefits won’t likely make a huge splash on the national economy.

“For households to change their spending patterns , they need to be confident that these benefits won’t be overturned or end abruptly. Without more certainty, households will be hesitant to spend,” she says.

And it isn’t as if the extra money will be forthcoming indefinitely. The extra $300 or $400 a week will end the week of Dec. 6.

Wait, what?

The additional unemployment benefits will end on Dec. 6, which is a Sunday, so Dec. 5 is the last day you’d likely have that additional money come. At that point, if it hasn’t already been done, Congress would have to step in and create a new enhanced unemployment benefit, or perhaps there would be more executive measures.

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$400 Unemployment Insurance Benefit: Who Qualifies, and When Does It Start? originally appeared on usnews.com

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