Funding for Bigger Unemployment Payments Coming Next Week
04 April 2020 - 1:29PM
Dow Jones News
By Sarah Chaney and Eric Morath
WASHINGTON -- Workers will have to wait a little bit longer for
larger unemployment-insurance payments aimed at helping millions of
people who have lost their jobs during the coronavirus
pandemic.
A senior U.S. Labor Department official said Friday that federal
funds promised to states, which administer jobless benefits, should
be distributed next week.
Workers over the past two weeks have filed for
unemployment-insurance benefits in record numbers, and states have
been anticipating funding and more specific instructions on how to
implement provisions to expand unemployment benefits included in a
$2 trillion federal stimulus package signed into law last week.
On Monday, Labor Secretary Eugene Scalia said these funds would
be distributed to states this week, but the federal government
won't meet that goal.
The senior Labor Department official expects states to have
individual accounts at the Treasury Department that they can draw
upon next week, the caveat being that states would need to be ready
with the proper technology to access and disburse these funds.
Some states would be ready to release the extra $600 weekly
payment to individuals within a week or two after tapping federal
money. For others, it could take two to four weeks or even longer,
the Labor Department official said.
The $600 additional payments are retroactive to last Saturday,
when the Labor Department entered into an agreement with states,
according to the official. That means, for instance, Americans who
don't receive the extra $600 a week until the end of April would
receive the payments all at once.
Pressure has been building for the government to act
quickly.
Many states are refraining from increasing unemployment payments
to laid-off Americans by $600 a week -- one of the major provisions
included in the stimulus plan -- until the federal government
provides the necessary cash.
Without specific guidance from the U.S. Labor Department, states
say they also are unable to accept or fully process claims from
individuals, like independent contractors and self-employed people,
who are newly eligible for unemployment benefits under the stimulus
package.
Ava Dejoie, secretary of Louisiana's workforce commission, said
those who work in the gig economy and at restaurants, among other
sectors, are dependent on getting unemployment checks fast.
"The American people need their money right now," Ms. Dejoie
said. "It's a lifeline. It means food on their table. It means that
their children can eat."
States including Louisiana, Nevada, Alabama, Rhode Island and
Oregon, said on Friday they hadn't received the federal funds to
increase jobless payments, which amounts to more than double the
existing maximum in some states. Ohio said on Thursday the state
hadn't gotten the federal funding.
State officials say they hope it comes quickly, especially given
the huge number of unemployment-benefit applications they are
processing.
"The sooner the better obviously because of the volume of
claims," said Rosa Mendez, public information officer at Nevada's
employment department.
Unemployment claims reached a record 6.6 million last week after
logging in at 3.3 million a week earlier. Until recently,
applications for unemployment benefits had been hovering near
200,000 a week.
States are in need of federal funding to pay the extra benefits
because they would have to otherwise draw on their own trust fund
money, which derives from employer taxes.
"There is no way that a state could say they could pay $600 in
benefits without an infusion in cash," Ms. Dejoie said. "That money
has been promised to the people of Louisiana by our federal
government."
States received preliminary guidance on implementation of the
federal stimulus from the Labor Department on Thursday evening.
They expect to receive more specific guidelines in the coming days.
Such specifics would answer questions on what types of paperwork
and tax forms individuals who are newly eligible for unemployment
benefits, such as gig-economy workers, would need to provide in
their benefits applications.
Write to Sarah Chaney at sarah.chaney@wsj.com and Eric Morath at
eric.morath@wsj.com
(END) Dow Jones Newswires
April 03, 2020 22:14 ET (02:14 GMT)
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