First Round of Boosted Unemployment Funds Roll Out to States — Not Wallets
Federal money to boost weekly unemployment payments is headed for the first batch of states, but it still has a way to go before hitting your bank account — that’s if your state opted in to the additional funds at all.
President Trump’s Aug. 8 executive order created the Lost Wages Assistance program, which ostensibly boosts states’ weekly unemployment benefits by up to $400. The boost is supposed to be a stopgap filling the hole left by recently expired $600 weekly payments authorized by the CARES Act.
Since the order went into effect, nine states have been approved for funding. Only one state, Arizona, has begun dispersing enhanced unemployment payments. The other states still have to devise a new payment system to get the money into people’s pockets.
“This is a lot more complicated than it’s made out to be,” Michele Evermore, senior policy analyst and unemployment insurance expert at the National Employment Law Project, told The Penny Hoarder. “It’s not a matter of simply turning [the $600 federal payments] back on again.”
Adding to the complication is that the program guarantees only $300 per week in federal funds, leaving the remaining $100 for states to pick up. And they’re not all sure if they can afford it.
Administrative Hurdles and Uncertainty
Though the Lost Wages Assistance program is available nationwide, not all states are opting into it. According to a survey from the Associated Press, as many as 30 states are still evaluating whether they can implement the plan.
Funding for the enhanced unemployment benefits comes from FEMA, which is requiring states to submit a grant application and meet certain benchmarks to get approved.
For states, the FEMA application process is the first of many hurdles in getting the boosted payments in the hands of more than 28 million Americans currently in the unemployment system.
Approved states are Arizona, Colorado, Iowa, Louisiana, Missouri, Montana, New Mexico, Oklahoma and Utah. The remaining states and U.S. territories have until Sept. 10 to apply for FEMA funds.
Once your state is approved, the FEMA funds first go into state coffers. State unemployment agencies won’t be able to immediately release them.
“The state still has to program things into their computer… This has to be separate admin funding from regular unemployment [payments],” Evermore said. “On top of that, this is already a strained [Unemployment Insurance] system. There’s still a backlog of benefits to be paid from March even.”
At least two states have opted out, according to the AP. The report didn’t name those states, though South Dakota is one state that has publicly stated it won’t be participating. Evermore says Alabama may be the other state.
“It’s not clear who’s going to be able to pay the benefits,” she said.
When is just as big a question.
“A couple of the states that are really pushing to get this benefit out are some of the states that had the hardest time paying out [other recent unemployment programs],” she said.
It Could Take ‘Months’ For Payments to Reach Most Americans
FEMA estimated that states could pay out the boosted benefits as early as Aug. 29, but unemployment experts suggest that timeline is unrealistic.
“My official guess would be a couple months,” Evermore said.
Here’s what you can do to weather a lapse in unemployment benefits.
The timeline will vary by state. The foremost factor is when your state applies to FEMA. Again, the deadline is Sept. 10. Beyond that — when the funds finally arrive — there’s still the question of how fast your state can fashion a new payment system. Some states move slower and use older computer systems, while others have modernized systems that allow them to move quicker.
The timeframe also depends on whether your state chooses to boost payments by $300 per week or $400.
The $300 boost is fully funded by the federal government, meaning it would be easier to implement. States choosing the $400 plan must pitch in $100 per week. That process could take even longer. According to the AP report, states like North Carolina that choose the $400 boost may run into additional delays because the funding needed for the $100 portion might require approval by the state’s legislature.
Taking all that into consideration, FEMA’s three-week timeline is “awfully ambitious,” Evermore said. “If you know anything about how UI administration works, it seems impossible.”