Several critical unemployment programs ended Saturday.
The need for these programs, unfortunately, did not.
Legislators reacted swiftly and decisively in March when they passed a number of federal unemployment programs as part of the CARES Act to prop up existing state unemployment insurance programs. While the pandemic and the recession it drove continues, these federal programs expired Saturday.
That left 12 million workers facing an unemployment cliff on Dec. 26, according to a report by progressive public policy firm The Century Foundation. Some people might still be able to get help from state unemployment programs, but the end of extra federal help will mean the end of benefits for millions, says Andrew Stettner, an unemployment researcher who co-authored The Century Foundation report.
It’s “economically insane,” Stettner told us.
While talks about more federal assistance continue, the stakes of these programs ending are becoming clearer. “People are just facing it right now,” Stettner says. “And I think it’s hitting people very hard this month.”
Here’s what you should know about exactly what programs are ending and what steps you can take if you are unemployed in the face of this uncertainty regarding additional benefits:
Unemployment Programs That Are Ending
In normal times, unemployed Americans turn to their state unemployment insurance programs for assistance while they are between jobs. But the pandemic and mass shutdowns early this year resulted in historic unemployment that swamped state programs. That’s where additional federal aid came into play — increasing and extending benefits to all unemployed workers, including many not typically eligible under state programs.
Here are the four major federal programs that were created to support existing state programs, and what it will mean when they end. All but one — the Pandemic Unemployment Compensation (PUC) program that paid $600 in weekly federal benefits through July — are set to expire this month.
Pandemic Unemployment Assistance
The Pandemic Unemployment Assistance (PUA) program provided pandemic-related unemployment assistance for people who don’t qualify for regular unemployment benefits. These benefits are retroactive to cover any weeks of unemployment due to the pandemic after Jan. 27, 2020.
Who it helps: Self-employed workers, freelancers or independent contractors, and other gig workers — who otherwise aren’t eligible for unemployment benefits — to get benefits.
Pandemic Emergency Unemployment Compensation
The Pandemic Emergency Unemployment Compensation (PEUC) program allows states to provide up to 13 weeks of federally funded unemployment benefits to certain workers, including those who have already used up available regular unemployment benefits.
Who it helps: Workers who have already exhausted available state benefits.
Federal-State Extended Benefits
The Federal-State Extended Benefits program is a permanent program that provides additional unemployment benefits to workers who have used all available state benefits in times and places of high unemployment. The CARES Act included adjustments to this program that shifted more funding of it to the federal government, and ensures available additional benefits are still available to workers after they have exhausted PEUC benefits.
Who it helps: Unemployed workers who have already used all available state and PEUC benefits.
Pandemic Unemployment Compensation
Who it helped: Individuals who were collecting regular unemployment compensation through their state programs, as well as additional federal and pandemic-related unemployment programs.
How These Programs Work
- State unemployment benefits: This is the first stop for workers in need of unemployment benefits. State benefits typically provide up to 26 weeks of unemployment assistance, though certain states and circumstances allow for longer.
- PEUC: Available after an unemployed worker uses all available state benefits.
- PUA: Available to self-employed, freelancers, and other workers not eligible for state unemployment benefits in the first place.
- EB: Available to unemployed workers in certain states after they’ve used all available PEUC benefits. These additional benefits are not available to those receiving PUA assistance.
How to Prepare
While nothing can take the place of cash that’s been helping unemployed Americans get by these past months, now is the time to start planning for if and when these extra federal benefits end.
“At this stage, we don’t have much of a safety net,” Stettner says. “People can apply for food stamps, for Medicaid … so you can have something to put on the table.”
We’ve covered unemployment and other pandemic-related financial challenges throughout the year, and some of our best advice remains the same. It’s also important to be proactive if you need help. In many cases you might be able to negotiate with your credit card issuers or other lenders, but if you wait until you fall too far behind on payments, you’ll likely have fewer options available.
Here’s some of the best advice we’ve come across:
- Contact your state representative or senator if you can’t make progress with your state unemployment office
- Connect with fellow unemployed Americans in your state, often in the form of Facebook groups
- Become an expert on your state unemployment benefits and timeline, starting with your state’s unemployment site
Revisit Your Finances
- Now is the time to start looking for a survival job, if you haven’t already, Stettner says. Maybe this is something you’ve done in the past while you look for a new job more in line with your recent experience. For others, it could be babysitting or driving for Uber, Stettner says.
- Take a look at your budget, and make sure it’s as lean as it can be by cutting back on non-essential spending
- Contact your credit card issuers and lenders to ask about and take advantage of any pandemic-related relief or forbearance programs
- If you have an emergency fund, now is the time to use it; if you don’t have an emergency fund, you may be able to tap into your 401(k) penalty-free.
- Explore potential help with child care: Some lower-income families can qualify for subsidized child care, plus other local and state programs can provide help too
Forbearance and Other Relief Programs
- If you own a home, inquire with your mortgage lender about forbearance, which has a Dec. 31 deadline to apply
- If you rent, start a dialogue with your landlord, look for rent-relief resources and start reading up on eviction law
- If you have student loans, the pause on repayment was recently extended through Jan. 31. If you are unemployed, take advantage of this extra month in which student loan payments and interest are suspended.
- If you’re one of the 80 million Americans who the U.S. Census Bureau recently found is having difficulty paying utility bills, take advantage of state programs.