FOR MANY AMERICANS who’ve lost work during the coronavirus pandemic, the $600 weekly unemployment insurance boost has been a lifeline.
Tens of millions of Americans, perhaps more than 20 million, are tapping unemployment benefits, according to some estimates. And for many of them, that extra $600 makes a significant difference in the amount of money they receive each week.
But that additional weekly income is set to expire July 31 unless Congress acts quickly. Without anything currently designated to replace that lost benefit, some Americans are wondering how to make rent, pay bills and buy groceries when it’s gone.
“Starting in August, there are going to be a lot of households around the country that are going to be facing very scary economic circumstances,” says Ed Bolen, senior policy analyst at the Center on Budget and Policy Priorities, a nonpartisan research and policy institute.
Here’s what to know about the expiring unemployment compensation boost and strategies to make ends meet without it.
What Is the Additional $600 Unemployment Compensation Boost?
When the Coronavirus Aid, Relief, and Economic Security Act became law in March, one of its major components was an expansion of jobless benefits, providing an additional $600 per week through the end of July to qualified recipients. “It goes to pretty much everyone who’s receiving unemployment insurance, so it’s a very broad tool,” Bolen says.
State governments, which administer unemployment insurance benefits, programmed the additional $600 into their benefit calculations.
While state payouts vary, the average weekly benefit for unemployment in the fourth quarter of 2019 was $378, according to the Federal Reserve Bank of St. Louis. That additional $600 makes a substantial difference: It increases that average benefit to $978 per week.
“This boost is recognition of the fact there was such an economic shock for so many people,” says Elaine Waxman, senior fellow at the Urban Institute, a nonprofit focused on elevating the debate on social and economic policy.
Why Is the $600 Unemployment Benefit Expiring?
The extra compensation is designed to expire July 31, according to federal legislation, so its end isn’t exactly unexpected.
What may be unexpected, however, is that the coronavirus pandemic and related employment woes have persisted so aggressively into the summer and (depending on your views) that politicians on Capitol Hill haven’t finalized a replacement or extension of the program.
What Happens When the $600 Unemployment Compensation Boost Expires?
Unemployment insurance recipients will see a drop-off in their benefit amount. People who were earning, say, $813 weekly in benefits will go to receiving $213 overnight, says Michele Evermore, senior researcher and policy analyst for the National Employment Law Project.
And even if a new stimulus package is passed with additional jobless benefits, it’ll take several weeks for states, which run unemployment insurance programs, to integrate the additional amount into their benefits systems, Evermore says. Benefits offices have to program the new amounts into their computer systems, and that takes time. “It’s not a matter of flicking the on-off switch in the other direction,” Bolen says.
That means that, even with a miraculously quick passage of a new relief package, unemployed folks are going to need to prepare to go several weeks or longer without that benefit boost.
How Can I Pay Bills Without the Additional Unemployment Compensation?
For households without sufficient savings, the loss of the additional $600 benefit may be terrifying. After all, it may have a sizable impact on their ability to meet weekly purchasing needs. The extension of the $600 per week jobless benefit through January 2021 would keep an estimated 3.6 million people out of poverty, according to recent data analysis from the Urban Institute.
Without it, there are few places to turn. But while the options aren’t great, there are some federal, state and local programs that may help fill the gaps for needy households. Consider these options:
The Supplemental Nutrition Assistance Program. “SNAP is definitely something to turn to,” Waxman says. Like unemployment insurance, the Supplemental Nutrition Assistance Program is administered by individual states, which may use their own names such as California’s CalFresh or Wisconsin’s FoodShare programs.
Temporary Assistance for Needy Families. This program, also shortened to TANF, provides assistance to low-income families. It is administered by states, with eligibility and benefit payouts varying by state.
Food banks and charities. Other options include local charities and food banks, which have been working hard to sustain families in many regions. They may offer assistance accessing food, clothing and other necessities.
Local housing assistance programs. If eviction is a fear, consider reaching out to local housing assistance organizations, Waxman says. These are nonprofits that can advise people on housing options and eviction avoidance strategies, including help accessing short-term emergency funds.
The good news for worried families is that there is substantial political will to extend some version of the expiring $600 compensation increase, although it may be a smaller dollar amount or come with new restrictions and an expiration date. Until then, it’s wise to slash spending and, if you don’t have savings on hand, research federal, state and charitable programs to keep you afloat. “I want people to understand they shouldn’t panic,” Evermore says. “Even though this feels really dire.”
