Millions may face lower unemployment benefits or lose them altogether

An employer holds out flyers for hospitality employment during a Zislis Group job fair at Brew Hall on June 23, 2021 in Torrance, Calif.

Patrick T. Fallon | AFP | Getty Images

Millions of Americans are on the verge of losing their unemployment benefits or seeing a lower weekly payment due to a collision of state rules and the expiry of federal programs.

These workers are reaching the end of their “performance year,” which marks one year since the application for assistance.

If help is sought beyond this point, a check is usually triggered by the state employment agencies. They evaluate a worker’s recent income statements to assess whether the person is eligible for a new rate of benefits – and if so, how much.

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However, recipients who have not found a job or worked a few hours since the beginning of the pandemic may be unlucky. Low income is likely to mean much less, if any, benefit.

So far, a federal program – Pandemic Emergency Unemployment Compensation – has largely received income support for these long-term unemployed, even after their “performance year” has expired.

But this program ends nationwide after Labor Day. Around two dozen states, mostly Republican-led, ended it prematurely.

According to the Ministry of Labor, around 4.7 million people – a third of all recipients – were receiving benefits through the program on June 26.

It is unclear how many of them first applied for benefits more than a year ago. However, another dataset from the Bureau of Labor Statistics suggests that 2.9 million Americans have been unemployed for more than a year, although not all of them necessarily have unemployment benefits.

“Maybe it could be several hundred thousand, maybe a million on the high end [who’d qualify for benefits again]”Said Andrew Stettner, Senior Fellow and Unemployment Benefit Expert at The Century Foundation, a progressive think tank.

“And for everyone else, they have to strive to find a job, get food stamps, use their savings,” he added. “Rent assistance should still be available, but it really is going to have no cash income.”

(This edition of the benefit year applies to those who are eligible for state unemployment insurance. Approximately 5.7 million self-employed, gig, freelancers and other workers who are not eligible for state benefits receive federal aid through the pandemic support program, which is also ends in September 6.)

The Pandemic Emergency Unemployment Compensation Program has been available to workers since the beginning of the pandemic.

It was created by the CARES Act and provides assistance to those who have exhausted their allocation of standard government benefits – usually up to 26 weeks, but sometimes much less, depending on the state.

Congress has twice extended the duration of the program through Covid relief measures decided in December and March. The most recent, the American Rescue Plan, extended it to September 6th.

Twenty-two states decided to end federal unemployment benefits, including assistance for the long-term unemployed, in June or July. (Another four opted to end early on a $ 300 weekly surcharge on benefits.)

State officials claimed the additional benefits resulted in recipients staying at home rather than looking for jobs. Critics of this stance say that other factors, such as persistent health risks and childcare obligations, have played a greater role in a perceived labor shortage.

In the meantime, an upturn in US Delta variant Covid cases, mostly among the unvaccinated, could negatively impact the local economy and potentially cause workers to turn back to the unemployment system.

States use different formulas to determine how workers can re-qualify for assistance at the end of their service year. All of them require at least some recent work experience to be eligible, albeit to varying degrees.

“This new year of performance will be based on income during the pandemic,” said Michele Evermore, a senior unemployment insurance advisor with the Department of Labor’s Employment and Education Administration. “And [payments] possibly significantly less than before, if they are entitled at all. “

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