What are extended unemployment benefits?
The federal-state unemployment insurance system provides unemployment benefits to people who have lost work through no fault of their own. It provides compensation to replace wages while they find new work. Basic unemployment provides up to 26 weeks of benefits to workers drawing unemployment and replaces approximately half of their individual average wages.
In cases of exceptional state unemployment rates, those who have exhausted basic unemployment benefits may be eligible for extended unemployment benefits.
Benefits of unemployment insurance
Unemployment benefits are intended to relieve stress from individuals and families who have lost jobs and work due to no fault of their own. When people lose employment and income, they are unable to participate in consumer activities in their local economy. Providing unemployment insurance and other benefits to workers provides them with income to put back into the economy and stimulate demand for more services and jobs.
Coronavirus Aid, Relief and Economic Security Act (CARES)
In March 2020, the CARES Act was passed to provide $2 trillion of stimulus funds to help support the U.S. economy. The CARES Act extended unemployment benefits for employees through 2020 and 2021.
American Rescue Plan
The American Rescue Plan extends unemployment benefits until September 6, 2021. It provides a weekly $300 supplemental benefit in addition to the regular $400 benefit. In addition, for individuals with incomes under $150,000 annually, the first $10,200 of unemployment benefits will be tax-free.
Who qualifies for extended unemployment benefits?
Individuals must meet all of the following conditions as determined by the U.S. Department of Labor to qualify for unemployment benefits:
- Have lost a job through no fault of their own
- Be able to work, available to work, and actively seeking work
- Have earned at least a certain amount of money during a base period prior to becoming unemployed
State laws vary in how they define these conditions. This applies to people who are unemployed, partially unemployed, or unable or unavailable to work because of COVID-19 reasons. It doesn’t apply to those who are able to work remotely.
Before the COVID-19 pandemic, self-employed individuals, contractors, and gig workers were not typically eligible for unemployment insurance. The CARES Act provides unemployment benefits to those individuals who would not otherwise qualify for unemployment insurance, including:
- Self-employed individuals, freelancers and contractors
- Gig workers
- Workers seeking part-time work
- Workers with insufficient work history or income to qualify for state unemployment insurance benefits
- Workers who don’t otherwise qualify for unemployment insurance benefits under state or federal law
Depending on state law, certain actions may disqualify an individual from claiming unemployment benefits, including:
- Fired or quit a job
- Resigned because of illness not related to COVID-19
- Labor dispute
- Attending school
How long does unemployment last?
Typically, unemployment benefits last up to 26 weeks as long as an individual maintains eligibility. Under the CARES Act, all states provided 13 additional weeks of unemployment benefits to eligible individuals, followed by additional weeks of federally funded benefits of 13-20 weeks, depending on the state. This means that individuals could receive an unemployment extension benefit of up to 59 weeks.
Certain states have discontinued extended unemployment benefits. The length of unemployment benefits depends on factors such as location, state unemployment rate, eligibility and available extended unemployment benefits.
Types of unemployment benefits
Basic unemployment benefits
Eligible individuals are able to claim either regular state unemployment benefits (UI) or pandemic unemployment benefits (PUA). Regular employees should apply for UI, while self-employed individuals who don’t qualify for UI should instead apply for PUA.
The amount of unemployment benefits paid out vary by state. Amounts are calculated based on the weekly benefit amounts under a state’s unemployment insurance laws.
Beginning January 27, 2020, the PUA program may provide up to 39 weeks of benefits to individuals. Once an individual has applied and been approved, retroactive benefits are available to those who qualified at the time. The PUA is set to expire on September 6, 2021.
Expanded unemployment benefit programs
The CARES Act also expanded certain benefit programs for eligible individuals who lost work due to the COVID-19 pandemic. Depending on how respective states implement the CARES Act, individuals will have access to the following benefit programs:
- The Federal Pandemic Unemployment Compensation Program (FPUC), which provided an additional $600 weekly to individuals collecting regular unemployment compensation. The Continued Assistance Act adjusted this amount to $300 weekly until March 14, 2021.
- The Pandemic Emergency Unemployment Compensation (PEUC) program provides up to 40 weeks of benefits from March 27, 2020 to September 6, 2021. This program allows those who have exhausted their unemployment compensation benefits to receive additional benefits as long as they met eligibility requirements.
Unemployment extended benefits
Enacted in 1970 by Congress, extended unemployment benefits (EB) are provided to eligible individuals in states experiencing high unemployment rates. The federal government and states split the cost of this program equally. It provides additional unemployment benefit weeks to workers in such states and who have exhausted their regular benefits.
Workers have access to up to 13 or 20 weeks of EB when the unemployment rate is especially high, such as during the Great Recession. This is dependent on factors like specific state laws, unemployment rates and state-specific rate triggers. Triggers are based on calculations regarding unemployment rates of either certain or total populations.
How workers can claim extended unemployment benefits
For workers to collect extended unemployment benefits, they must first apply for basic unemployment insurance benefits. They should file a claim with the unemployment insurance in their state as soon as they are unemployed or have lost work. Following unemployment insurance approval, workers will either be paid automatically for extended benefits or will need to complete additional applications depending on their state.
