money More than 11 million Americans face potential loss of unemployment benefits this spring
Up to 11.4 million workers stand to lose their base unemployment benefits this spring, while all out-of-work Americans could see the extra $300 in weekly benefits disappear if no stimulus deal is passed, allowing three unemployment programs to expire.
The Pandemic Unemployment Compensation (PUC), which provides an additional $300 in weekly benefits, expires on March 14. The Pandemic Unemployment Assistance (PUA) that provides benefits to contractors and self-employed workers and the Pandemic Emergency Unemployment Compensation (PEUC), which provides an additional 24 weeks of benefits, both expire on April 11.
“If Congress doesn't want a big break in benefits, it will be really important for them to enact this before that March 14 date, so no one gets cut off,” Andrew Stettner, an unemployment insurance expert and senior fellow at the Century Foundation, told Yahoo Money. “It can be a big trouble for the system to do that.”
When the benefits lapse, 5 million would lose PEUC benefits and 6.4 million would lose PUA benefits, according to an analysis by Stettner from The Century Foundation and Elizabeth Pancotti from Employ America.
Only 733,500 of these workers would be able to move to Extended Benefits (EB), a federal program that provides an additional 13 weeks in benefits. But that program is expiring in many states as their unemployment rates decrease. Only 12 states are projected to have the program in place in April.
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For instance, jobless workers in populous states like California and New York won’t be able to move to the EB programs if no more relief is passed. About 2.5 million workers in California and 1.4 million in New York would lose benefits in those states.
The expiration of those programs would also disproportionally affect Black and Hispanic workers who are now more dependent on unemployment benefits than in earlier stages of the pandemic.
From September to November, 20% of all state Unemployment Insurance (UI) claimants were Black and 20% were Hispanic, an increase from April when those workers accounted for 14% and 15% respectively, according to the Federal Reserve Bank of Atlanta.
“The demographics of this has continued to change,” Stettner said. “People that are in this situation and relying on unemployment benefits as the pandemic deepens are more likely to be Black or Hispanic workers than they were earlier.”
‘The most important thing is to get it passed by March 14’
Under President Joe Biden’s $1.9 trillion stimulus plan, the extra weekly amount in unemployment benefits would increase to $400 a week from $300. Those benefits, along with the PUA and PEUC programs, would be extended through September. The Ways and Means Committee, which is helping draft the reconciliation bill, proposed extending those programs only through August.
“The most important thing is to get it passed by March 14,” Stettner said. “I will really be looking for them to pass it two weeks before then, to avoid any kind of gap.”
Democrats are trying to pass the $1.9 stimulus plan through reconciliation, which requires only 51 votes. That means the support of the entire Democratic caucus in the Senate, along with Vice President Kamala Harris’s tie-breaking vote, would be enough to pass it. Democrats have said they would have the reconciliation package ready for a vote in the House by the week of February 22.
Jobless workers have faced a benefits cliff before.
The most recent stimulus package in December wasn’t passed in time to prevent key unemployment programs from expiring at the end of last year. That meant out-of-work Americans had to wait for the program to be restarted or sign up again for the benefits, delaying their payments. As much as $17.6 billion in unemployment benefits — or 38% less than what out-of-work Americans were due to receive — didn’t reach their bank accounts in January, another analysis by The Century Foundation found.
Denitsa is a writer for Yahoo Finance and Cashay, a new personal finance website. Follow her on Twitter @denitsa_tsekova.
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