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Millions face lapse in unemployment benefits despite new coronavirus relief deal

Megan Henney
·2 min read

Although Congress passed a long-awaited coronavirus relief bill on Monday night that will extend unemployment benefits to millions of laid-off Americans, some could still lose their income the day after Christmas.

Outdated state unemployment insurance systems across the U.S. are expected to slow the distribution of aid — a delay that could affect up to 12 million laid-off workers who were set to see their jobless aid lapse in just a couple of days once two federal aid programs created earlier this year expire.

“We’re too far gone,” says Elizabeth Pancotti, a policy adviser at the pro-worker Employ America, told USA Today. “We would have needed a deal before Thanksgiving for there not to be a lapse in benefits.”

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Under the $900 billion measure, which was attached to the $1.4 trillion government spending bill, laid-off workers will get an extra $300 per week in federal unemployment aid for 11 weeks, through March 14.

The bill also expands unemployment benefits to self-employed individuals, gig workers and those who have exhausted their state benefits by extending CARES Act programs, including the Pandemic Unemployment Assistance program and Pandemic Emergency Unemployment Compensation program.

But it could take several weeks for states to actually start distributing the $300 boost, Pancotti said, estimating that it could at least three weeks, but as many as six to eight in some states. That means many unemployed Americans won't start receiving the cash until at least January, if not even later.

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State agencies are hobbled by notoriously outdated technology and understaffed offices; many rely on COBOL, an Eisenhower-era computer system. More than 20 million Americans are collecting financial support, according to Labor Department data.

In March, Congress established two federal programs for jobless Americans with the passage of the CARES Act: Pandemic Unemployment Assistance (PUA), a program created to provide jobless benefits to gig workers and others typically not eligible for benefits, and Pandemic Emergency Unemployment Compensation (PEUC), which extends the typical 26 weeks of unemployment benefits offered by states by an extra 13 weeks.

Both programs were set to expire on Dec. 26.

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Because many out-of-work Americans have used up their 26 weeks of state jobless aid, they have transferred to obtaining the money through the PEUC. There are about 7.3 million workers currently receiving PUA benefits and roughly 4.6 million receiving PEUC benefits.

States will need to wait for the Labor Department to send out guidance before they can begin issuing the payments.

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