President Donald Trump on Saturday authorized an additional $ 400 weekly unemployment insurance benefits, a potential financial lifesaver for the nation’s 16.3 million unemployed workers. However, while his memo makes those payments valid back to August 1, the amount could take weeks to reach people and the amount is less than advertised for some people claim.
Mr. Trump’s efforts to partially restore the additional benefits, whichThat means states will need to establish new systems to manage benefits, which can take significant time to set up and operate, according to unemployment experts. Outcome: Unemployed workers should not expect additional benefits to be deposited into their bank accounts in the next few weeks.
Some states may also not have the funding to provide 25% of the benefit, as it is suggested. That could see aid drop to $ 300 a week, half of what the weekly pay-off employee had received until the end of July passed the CARES Act.
Certainly, any additional financial aid will help millions of Americans who are unemployed and struggling to find new jobs. But the complexity of the unemployment system ̵1; combined with political and legal uncertainties surrounding Trump’s end of his term after Congress disagreed on a new stimulus package last week – has opened up a White House initiative series of questions.
Michelle Evermore, senior policy analyst at the National Employment Law Project, an advocacy group, said: “It’s tragedy – workers are looking forward to getting this because the president promised them. “. “That would be a real challenge for states to say they can get up and running.”
States will likely have to establish new systems to manage aid, as the federal portion will originate from the $ 44 billion in funds allocated to disaster relief. Nations cannot use their current unemployment system for entitlements allowed outside Congress, the NELP noted.
Here are other things you should know about Trump’s move to begin his effort to increase unemployment aid to Americans:
When will I get an extra $ 400?
Andrew Stettner, senior fellow at The Century Foundation, a progressive think tank, said don’t expect to receive additional unemployment benefits this month. Because states need to build a new system to manage money, they may not be able to distribute the money until September, he said.
“We’d be lucky if anyone got the money in August,” Stettner said.
Currently, some unemployed workers are posting questions on social media about when they might receive additional aid, pointing to Mr. Trump’s memo saying it will start on January 1. 8 for those who qualify. Instead, unemployed Americans will most likely get their payments back from 1 August after the program starts, Stettner said.
How long will the $ 400 payment take?
Mr Trump’s plan will fund an additional unemployment benefit by extracting $ 44 billion from the National Disaster Relief Fund. That’s enough for four or five weeks, according to Raymond James analyst Ed Mills.
What if my state is unable to fund?
This is one of the biggest questions regarding the Trump directive, which says the federal government will provide $ 300 in additional aid and the states will contribute $ 100 more.
Some governors have said that the $ 100 per person contribution is beyond capacity, with Governor Andrew Cuomo of New York calling it “impossible.” That’s because many states were financially constrained by tax losses after the coronavirus epidemic shut down the economy.
Trump’s order specifies that state funding will come from the $ 150 billion Coronavirus Relief Fund (CRF), but some states have spent or saved that money.
“For many states, the remainder of the CRF will be enough to pay the state’s share of the benefits,” Goldman analysts wrote in a research note. “However, some states have used most or, in the case of California, all of their CRF allocation, which will cause them to fund benefits from other state resources.”
The states have a different option, according to a Sunday memo from the Department of Labor seen by CBS MoneyWatch. The MOU says they can “charge their existing unemployment insurance (UI) benefit from the state fund” into their $ 100 contribution.
“It looks like if you’re getting state unemployment benefits of at least $ 100, you should be able to get that 300, even if your state can’t pay another $ 100,” Stettner said.
In fact, workers in those states would only get an extra $ 300 in addition to their usual unemployment benefits, instead of the expected $ 400, he noted.
Who will not be eligible for the additional benefits?
Unemployed workers who receive unemployment wages below $ 100 a week will not be eligible for the $ 400 additional aid authorized by Mr. Trump.
That is attracting criticism from experts who say it will hurt the workers most in need – low-paid workers like waiters and contract economists. who may not be eligible for higher unemployment benefits.
“It affects those at the bottom of the income spectrum or in the gigs,” Stettner said. “They have the least to make – and get nothing.”