These Unemployment Benefits Will End Next Month

White House economic adviser Larry Kudlow (Photo by BRENDAN SMIALOWSKI/AFP via Getty Images)

AFP via Getty Images

Your $600 weekly unemployment benefit will end next month.

Here’s what you need to know.

Unemployment Benefits Will Not Be Extended

“We’re paying people not to work,” National Economic Council Direct Larry Kudlow said on CNN. “It’s better than their salaries would get. That might have worked for the first couple of months. It’ll end in late July.”

Kudlow is referring to $600 a week unemployment benefits that are available to individuals in addition to traditional weekly unemployment benefits starting from the date you lose your job. These unemployment benefits, which were created under the CARES Act (the $2.2 trillion stimulus package) to help individuals in the wake of the COVID-19 pandemic, are included in your gross income and are taxable at your ordinary income tax rate. The $600 weekly benefits are slated to expire on July 31, and Kudlow expects that these benefits will not be extended.

Why won’t unemployment benefits be extended?

More than 40 million Americans have lost their job due to the COVID-19 pandemic. Some have argued that, given the current amount of unemployment benefits, you can receive more money being unemployed than being employed. They argue this creates a potential disincentive to return to work, which also can create a longer-term unemployment issue. Rather than extend these unemployment benefits, Senate Republicans and the White House may consider a cash bonus for workers to return to work. A “return to work” bonus would pay someone who is unemployed a financial bonus to get a job or return to their job if they are furloughed. Sen. Rob Portman (R-OH) proposed a $450 weekly bonus for every individual who returns to work before July 31, 2020. In contrast, Sen. Ron Wyden (D-OR) has a plan to extend unemployment benefits that would base the duration and amount of unemployment benefits in a particular state based on that state’s unemployment rate.

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How much unemployment will I get?

Unemployment benefits are managed at the state level. Each state sets its own eligibility criteria and amount of unemployment benefits. In most states, you are paid weekly, and you receive unemployment benefits from the state in which you last worked. When you lose your job, depending on the state, you can receive unemployment benefits up to half your wages, subject to a maximum benefit. While each states decides the length of unemployment benefits, most states offer 26 weeks of unemployment benefits through a state-funded unemployment insurance system. This includes states such as New York, California, Texas, Pennsylvania, Minnesota and Ohio. Seven states provide less than 26 weeks of unemployment compensation. For example, Florida and North Carolina each offer 12 weeks of unemployment benefits.

What types of unemployment benefits are there?

If Congress does not renew the $600 a week unemployment benefits, and you are still unemployed, you can still receive other unemployment benefits such as:

Unemployment Benefits: Traditional unemployment benefits through your state.
PEUC: Pandemic Emergency Unemployment Compensation provides an additional 13 weeks of unemployment benefits. In most states, this means you can receive up to 39 weeks of unemployment.
PUA: If your state provides less than 39 weeks of unemployment benefits, you can receive the difference through Pandemic Unemployment Assistance.

The House of Representatives passed the Heroes Act, a $3 trillion stimulus package, which would extend the $600 a week unemployment benefits through January 31, 2021. However, Senate Majority Leader Mitch McConnell (R-KY) does not support extension of these unemployment benefits, and they likely will not be included in the next stimulus bill.