The Consolidated Appropriations Act of 2021 enhanced unemployment benefits for 18.6 million Americans relying on jobless pay during the pandemic. The act extended FPUC (a $300-per-claimant additional benefit to all recipients), PEUC (extended benefits for the long-term unemployed), and PUA (benefits for low-wage and self-employed workers not eligible for regular unemployment) through March 2020. Unfortunately, payment of these benefits rolled out slowly in January 2021 as the late enactment of the legislation complicated state implementation. One month after the law’s enactment, nearly a quarter of the states have not resumed paying out federal pandemic aid. Moreover, an additional twelve states took three weeks or more to start up the payment of PUA, and fifteen states needed three weeks or more to reup PEUC.
By our calculations, these delays have resulted in shortchanging jobless workers by about $17.6 billion in benefits for the first four weeks in January 2021—38 percent less than these workers were due to receive. This is money that these workers and their families needed to pay rent, put food on the table, stay out of poverty, and keep America’s economy running while they looked for work.
Anatomy of the Delay
Congress enacted the bill on December 21, but President Trump delayed signing the law until December 27. While the president was given the opportunity to sign the bill on December 24, he demurred, and allowed all of the unemployed workers relying on pandemic benefits to lapse coverage on December 26. By this point, states had already notified workers that their benefits were set to expire and began the process of transitioning people off of assistance.
The delay also prevented states from getting a head start on responding to changes that the bill called for. In the legislation, Congress enacted a series of new eligibility rules for the PUA program related to identity, employment verification, and weekly certification. In addition, hundreds of thousands of workers who had exhausted PEUC or PUA benefits before December 26, 2020 gained an additional eleven weeks of benefits that they could access if they were still out of work as of January 2, 2020, but they needed time to reapply and verify they were still out of work.
As a result, the delay presented states with major implementation challenges and unanswered questions about how to properly pay benefits that were due within six days of the president signing the legislation. States awaited guidance from the U.S. Department of Labor on the key parameters left to interpretation in the law. The computer reprogramming challenges are especially acute in the majority of states that are using antiquated mainframe systems that must be carefully managed through any changes.
Backups in payments were inevitable in this context. While any delayed benefits would be paid retroactively, these delays have consequences. Among Americans who did not have the same income as before the pandemic, 72 percent said they had trouble meeting basic household expenses and 31 percent reported not having enough money to pay for food. Families who have been out of work for as long as nine months during the pandemic have reached the end of their financial rope—4.7 million people were behind on rent, and for 4.8 million people (including 1.3 million children), this aid was the last thing keeping them from being thrown from the working class into poverty. Put simply, a retroactive check in February can’t be used to put food on the table in January.
Implementation Challenges, State by State
To understand the delays, The Century Foundation surveyed state Department of Labor websites and local news sources to compare the experiences of the states. In general, two states quickly delivered the additional $300 FPUC payments, first for those who were on underlying state benefits—including Extended Benefits (EB)—that had not been interrupted by the December 26 deadline. Some states, such as Minnesota, North Carolina, and Maryland, were able to swiftly implement the changes and continue PUA and PEUC, as well as begin FPUC benefits within the first week the newly extended program was up and running. Maryland reported that, in the first two days of the extended program being up, the state had paid claimants approximately $43 million from the FPUC program, $25 million from the PUA program, and $11 million from the PEUC program. Minnesota began paying out on January 4, and by January 8, it reported that nearly $44 million in PUA and PEUC payments and $77 million in FPUC payments had been paid out to 240,000 Minnesotans.
Not all states were as efficient as these. As indicated in Map 1, as of January 30, 2021, our research identifies forty states that were paying out PUA and thirty-eight states that were paying out PEUC (including Ohio’s announced payments on January 31 and Colorado’s announced payments on February 1). Of the forty states paying out PUA, twelve states had more than a two-week delay in getting the programs up and running. Similarly, of the thirty-eight states paying out PEUC, fifteen states took more than two weeks to get their systems paying out to claimants. Even some of the states generally paying out PUA and PEUC benefits have yet to restart them for all those who gained new eligibility from the bill after having exhausted CARES Act aid.
Some states are lagging more significantly in implementing the programs, often blaming either a system update or that they were awaiting guidance from the U.S. Department of Labor. Colorado, for example, has not been able to pay out FPUC, PUA, or PEUC to any claimants because its entire system has been down for maintenance, although it recently announced it will allow claimants to reopen their existing PUA and PEUC on February 1, more than a month after the programs were extended. Wisconsin has had similar struggles with its out-of-date system, and some state Department of Workforce Development officials recently said that they do not expect the new PEUC benefits to go into effect until the first week of March. While more PUA and PEUC programs have come online in the past two weeks, there are still eleven states with no confirmation on paying out PUA and thirteen states with no confirmation on paying out PEUC, as of January 30, 2021. In these states, jobless workers have been left with few answers, as they are forced to go without aid because of the stop-and-start nature of pandemic programs.
map 1
Data Confirm Reported Payment Delays
Data from the U.S. Department of the Treasury confirm the delays in payments. Table 1 estimates how much would have been paid out if benefits had not been interrupted by the delay in enacting the stimulus bill, using the claims levels on December 26. Those who should have received benefits include all those previously collecting state or federal unemployment insurance (UI) on December 26, as well as those who exhausted PEUC or PUA benefits in 2020 and were still out of work. We estimated that approximately 1.1 million people had exhausted these benefits in 2020 and were still out of work in January. Based on the addition of the $300 per week for all claimants, the combined UI program should have been paying out $11.6 billion per week in January.
Table 1
| Estimated Potential Weekly Payout of Unemployment Benefits After December 26, 2000 |
|
Claims |
Weekly Benefit Amount |
Predicted Total Payout |
| State |
5,382,459 |
$639 |
$3,439,391,301 |
| PEUC |
4,166,261 |
$636 |
$2,662,240,779 |
| PUA |
7,442,888 |
$540 |
$4,019,159,520 |
| EB |
1,326,802 |
$639 |
$847,826,478 |
| PEUC Exhaustees |
625,000 |
$639 |
$399,375,000 |
| PUA Exhaustees |
450,000 |
$540 |
$243,000,000 |
| Total |
|
|
$11,610,993,078 |
| Source: Authors’ estimates from U.S. Department of Labor data. |
As illustrated in Figure 1, actual payouts reported by the Department of the Treasury for all unemployment benefits totaled only $28.7 billion in the first four weeks of January, which is, by our calculation, $17.6 billion less than the $46.1 billion in benefits that would have gone out if everyone would have received the promised aid on time. Workers have thus received 38 percent less than they could have if benefits were uninterrupted and they had received the $300-per-week supplement. The good news is that payouts are starting to catch up, reaching nearly $9 billion in the fourth week of January, even though they are clearly still not reaching all that are eligible. The slow rollout of aid has been eased by the $600-per-week stimulus that began to be processed immediately by the Department of the Treasury after the stimulus law was passed. Nonetheless, the pause in pandemic benefits undoubtedly added to financial stress of those left behind in the COVID-19 recovery
Figure 1
Looking Ahead
Programs for the unemployed once again face a breaking point as aid enacted after Christmas will begin expiring on March 14 (and fully end on April 11). The costs of waiting until the last moment to extend benefits has been made clear by the experiences of the recent stimulus bill. Given the delays experienced after the stimulus bill, Congress should move swiftly to enact the package requested by President Biden that would continue jobless aid through at least September. A swift enactment would be the best Valentine’s Day present that America’s plagued jobless workers—and the states that are responsible for delivering aid—could ask for.
Tags: unemployment benefits, us economy, covid-19
Delay in Extending Unemployment Aid Has Shortchanged Workers $17 Billion in January
The Consolidated Appropriations Act of 2021 enhanced unemployment benefits for 18.6 million Americans relying on jobless pay during the pandemic. The act extended FPUC (a $300-per-claimant additional benefit to all recipients), PEUC (extended benefits for the long-term unemployed), and PUA (benefits for low-wage and self-employed workers not eligible for regular unemployment) through March 2020. Unfortunately, payment of these benefits rolled out slowly in January 2021 as the late enactment of the legislation complicated state implementation. One month after the law’s enactment, nearly a quarter of the states have not resumed paying out federal pandemic aid. Moreover, an additional twelve states took three weeks or more to start up the payment of PUA, and fifteen states needed three weeks or more to reup PEUC.
By our calculations, these delays have resulted in shortchanging jobless workers by about $17.6 billion in benefits for the first four weeks in January 2021—38 percent less than these workers were due to receive. This is money that these workers and their families needed to pay rent, put food on the table, stay out of poverty, and keep America’s economy running while they looked for work.
Anatomy of the Delay
Congress enacted the bill on December 21, but President Trump delayed signing the law until December 27. While the president was given the opportunity to sign the bill on December 24, he demurred, and allowed all of the unemployed workers relying on pandemic benefits to lapse coverage on December 26. By this point, states had already notified workers that their benefits were set to expire and began the process of transitioning people off of assistance.
The delay also prevented states from getting a head start on responding to changes that the bill called for. In the legislation, Congress enacted a series of new eligibility rules for the PUA program related to identity, employment verification, and weekly certification.1 In addition, hundreds of thousands of workers who had exhausted PEUC or PUA benefits before December 26, 2020 gained an additional eleven weeks of benefits that they could access if they were still out of work as of January 2, 2020, but they needed time to reapply and verify they were still out of work.
As a result, the delay presented states with major implementation challenges and unanswered questions about how to properly pay benefits that were due within six days of the president signing the legislation. States awaited guidance from the U.S. Department of Labor on the key parameters left to interpretation in the law. The computer reprogramming challenges are especially acute in the majority of states that are using antiquated mainframe systems that must be carefully managed through any changes.
Backups in payments were inevitable in this context. While any delayed benefits would be paid retroactively, these delays have consequences. Among Americans who did not have the same income as before the pandemic, 72 percent said they had trouble meeting basic household expenses and 31 percent reported not having enough money to pay for food. Families who have been out of work for as long as nine months during the pandemic have reached the end of their financial rope—4.7 million people were behind on rent, and for 4.8 million people (including 1.3 million children), this aid was the last thing keeping them from being thrown from the working class into poverty. Put simply, a retroactive check in February can’t be used to put food on the table in January.
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Implementation Challenges, State by State
To understand the delays, The Century Foundation surveyed state Department of Labor websites and local news sources to compare the experiences of the states. In general, two states quickly delivered the additional $300 FPUC payments, first for those who were on underlying state benefits—including Extended Benefits (EB)—that had not been interrupted by the December 26 deadline. Some states, such as Minnesota, North Carolina, and Maryland, were able to swiftly implement the changes and continue PUA and PEUC, as well as begin FPUC benefits within the first week the newly extended program was up and running. Maryland reported that, in the first two days of the extended program being up, the state had paid claimants approximately $43 million from the FPUC program, $25 million from the PUA program, and $11 million from the PEUC program. Minnesota began paying out on January 4, and by January 8, it reported that nearly $44 million in PUA and PEUC payments and $77 million in FPUC payments had been paid out to 240,000 Minnesotans.
Not all states were as efficient as these. As indicated in Map 1, as of January 30, 2021, our research identifies forty states that were paying out PUA and thirty-eight states that were paying out PEUC (including Ohio’s announced payments on January 31 and Colorado’s announced payments on February 1). Of the forty states paying out PUA, twelve states had more than a two-week delay in getting the programs up and running. Similarly, of the thirty-eight states paying out PEUC, fifteen states took more than two weeks to get their systems paying out to claimants. Even some of the states generally paying out PUA and PEUC benefits have yet to restart them for all those who gained new eligibility from the bill after having exhausted CARES Act aid.
Some states are lagging more significantly in implementing the programs, often blaming either a system update or that they were awaiting guidance from the U.S. Department of Labor. Colorado, for example, has not been able to pay out FPUC, PUA, or PEUC to any claimants because its entire system has been down for maintenance, although it recently announced it will allow claimants to reopen their existing PUA and PEUC on February 1, more than a month after the programs were extended. Wisconsin has had similar struggles with its out-of-date system, and some state Department of Workforce Development officials recently said that they do not expect the new PEUC benefits to go into effect until the first week of March. While more PUA and PEUC programs have come online in the past two weeks, there are still eleven states with no confirmation on paying out PUA and thirteen states with no confirmation on paying out PEUC, as of January 30, 2021. In these states, jobless workers have been left with few answers, as they are forced to go without aid because of the stop-and-start nature of pandemic programs.
map 1
Data Confirm Reported Payment Delays
Data from the U.S. Department of the Treasury confirm the delays in payments. Table 1 estimates how much would have been paid out if benefits had not been interrupted by the delay in enacting the stimulus bill, using the claims levels on December 26. Those who should have received benefits include all those previously collecting state or federal unemployment insurance (UI) on December 26, as well as those who exhausted PEUC or PUA benefits in 2020 and were still out of work. We estimated that approximately 1.1 million people had exhausted these benefits in 2020 and were still out of work in January. Based on the addition of the $300 per week for all claimants, the combined UI program should have been paying out $11.6 billion per week in January.
Table 1
As illustrated in Figure 1, actual payouts reported by the Department of the Treasury for all unemployment benefits totaled only $28.7 billion in the first four weeks of January, which is, by our calculation, $17.6 billion less than the $46.1 billion in benefits that would have gone out if everyone would have received the promised aid on time. Workers have thus received 38 percent less than they could have if benefits were uninterrupted and they had received the $300-per-week supplement. The good news is that payouts are starting to catch up, reaching nearly $9 billion in the fourth week of January, even though they are clearly still not reaching all that are eligible. The slow rollout of aid has been eased by the $600-per-week stimulus that began to be processed immediately by the Department of the Treasury after the stimulus law was passed. Nonetheless, the pause in pandemic benefits undoubtedly added to financial stress of those left behind in the COVID-19 recovery
Figure 1
Looking Ahead
Programs for the unemployed once again face a breaking point as aid enacted after Christmas will begin expiring on March 14 (and fully end on April 11). The costs of waiting until the last moment to extend benefits has been made clear by the experiences of the recent stimulus bill. Given the delays experienced after the stimulus bill, Congress should move swiftly to enact the package requested by President Biden that would continue jobless aid through at least September. A swift enactment would be the best Valentine’s Day present that America’s plagued jobless workers—and the states that are responsible for delivering aid—could ask for.
Notes
Tags: unemployment benefits, us economy, covid-19