Up to 2 million workers could be left with no unemployment benefits for weeks as states reprogram systems

Up to 2 million workers could be left with no jobless benefits until next month as states reprogram their unemployment systems. The delay comes nearly two weeks after President Joe Biden's $1.9 trillion relief deal expanded many jobless programs.

"We never want to delay, we never want the benefits to be late," Andrew Stettner, an unemployment insurance expert and senior fellow at the Century Foundation who provided the estimate, told Yahoo Money. "It's difficult for people that don't have any other income... bills are due and landlords are anxious. We want people to get this money in a continuous fashion."

Under the latest deal, unemployed workers would continue to get the additional $300 a week in Federal Pandemic Unemployment Compensation (FPUC) through September 6. The Pandemic Unemployment Assistance (PUA), Pandemic Emergency Unemployment Compensation (PEUC), and the Mixed Earner supplement (MEUC) programs were all expanded under the legislation.

The unemployment benefits paid out declined by $1.35 billion last week due to the delays in resuming the programs, according to data from the Treasury Department. Similar delays occurred when implementing the $900 billion stimulus deal signed into law in December when close to 6 million people had their benefits delayed, according to Stettner.

Delay in extra weekly benefits

The biggest hiccup revolves around the additional $300 in weekly benefits. So far, only 12 states have begun distributing the extra weekly unemployment benefits including California, New York, and Delaware. Previously when the programs were restarted it took more than a month for some states to set them up.

The Labor Department recently said this time, many states may need until the middle of April or later to implement the new provisions.

"I would expect most of the states to get the $300 dollars out — if they're not getting them out this week — by next week," Stettner said. "I would expect that some of the same states that had challenges last time will have challenges again."

The last time the programs were restarted, 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 on time in January, an analysis by The Century Foundation found.

NEW YORK, NY - FEBRUARY 05: People walk through a Manhattan neighborhood on February 05, 2021 in New York City. New government jobs numbers released on Friday showed that while 49,000 jobs were added in January, the United States economy is still down nearly 10 million jobs lost since before the pandemic began last year. (Photo by Spencer Platt/Getty Images)
People walk through a Manhattan neighborhood on February 05, 2021 in New York City. (Photo by Spencer Platt/Getty Images)

'Some states haven't been paid out from the last bill'

The implementation of the PEUC program — which provides extra weeks of benefits after the regular benefits run out — and PUA program — which provides benefits to workers who don't normally qualify for unemployment — also are taking more time.

Workers already on PUA and PEUC and are in benefit status will continue getting their payments through April 10, when the majority of states are expected to have restarted their programs. Those who have run out of weeks under those programs are the ones likely to see a delay.

The legislation also extends the Mixed Earner supplement (MEUC) program created under the December stimulus bill. But that program, too, is facing serious delays, according to Stettner. Under it, some “mixed-income” earners who get income from both traditional (W-2) and self-employed (1099) sources would continue to get an extra $100 on top of the extra $300 a week until September 6.

"Some states haven't been paid out [that benefit] from the last bill," he said. "These new benefits can make the delay even longer."

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Denitsa is a writer for Yahoo Finance and Cashay, a new personal finance website. Follow her on Twitter @denitsa_tsekova

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