Unemployment: What do you do after July 31st?

A COVID-19 related stimulus check on a desk

The extra $600 in weekly unemployment benefits will end the week of July 31st.  The clock is ticking down.  Each state has its own criteria for who is eligible to receive unemployment benefits, but the money you receive is usually based on your income.  The CARES Act included the super-boost by adding the extra $600 per week and extended the states’ unemployment benefits to a maximum of 39 weeks, instead of the typical 26 weeks.  It also added gig workers, freelancers, independent contractors and small businesses to the list. Without an extension of the $600, the average American’s aid will decrease by 61% to about $380 a week.

Life vs. Livelihood
These issues are complex.  Most of us have never been in a situation in which we have to decide whether the risk of exposure to illness outweighs the potential economic damage.  None of us wants to see the economy suffer, and we want to get back to work, but we also don’t want to see people suffer.  Unemployment benefits can give unemployed or furloughed workers great leverage.

Many states are pushing for workers to get back to work too.  All states had eased their rules around job-hunting during unemployment; however, some states are reinstating “work search” requirements as a condition of receiving unemployment benefits, including the extra $600.  Unemployed or furloughed workers who don’t comply with this may risk losing their benefits, and may even have to pay back some of their benefits they have already received.

States are feeling the economic pressure, as their trust funds set up to cover unemployment are getting drained.  Congress is mulling over the idea of replacing the extra $600/week with a cash bonus for people who return to work.  Actually, two-thirds of unemployed workers are receiving higher wages now than they were receiving while working.1  Washington is also considering tying unemployment benefits to a percentage of previously earned salary, rather than a set dollar amount, thus reducing the issue of those getting paid not to work.  However, with the recent surge in new Covid cases, many states may have to push the “Pause Button” on their plans to reimpose the job-hunting rules, and push “Reset” when they get a better handle on the number of new cases increasing.

Stress Not
Most rules that will prove you are searching for a job are not that troublesome.  You need, in most cases, to show that you have been looking for employment, like completing three job searches.  You don’t have to succeed in getting a new job.  You can go to your state’s job website; attend online job fairs; complete some online applications; some states even count social networking or emailing employers as “job-hunting”.  If you have been furloughed, find out whether you have specific requirements by going to your state’s unemployment website.

Your To-Do List

  1. If you have been furloughed, check with your HR department to see the status of when you will likely be called back to work and no longer be eligible to collect unemployment benefits.
  2. Check with your State Unemployment Office to see if you have to prove you are looking for a job in order to receive continuing benefits.
  3. If the answer is yes, then ask what is required and how to prove that you have fulfilled the requirement(s).
  4. Talk to a non-judgmental and unbiased Money Coach about how to prepare for potential changes in cash flow.

Whether you’re dealing with unemployment or not, a Money Coach can help you determine next steps for handling finances in uncertain times.  Call 888-724-2326 today to get started.

1Ganong, Peter, et al. “US Unemployment Insurance Replacement Rates During the Pandemic.” NBER, 21 May 2020, www.nber.org/papers/w27216. © 2020 by Peter Ganong, Pascal J. Noel, and Joseph S. Vavra. All rights reserved.