An additional $ 600 to unemployment benefits may be canceled earlier than expected

For tens of millions of Americans receiving unemployment benefits, $ 600 supplemental payments will end sooner than expected. Writes about it CNBC.

The $ 600 weekly payout from the Federal Unemployment Compensation Scheme was introduced by Congress, under the CARES Act, adopted in late March, to address the effects of the COVID-19 pandemic.

Americans eligible for unemployment benefits receive an additional $ 600 in addition to what they usually receive from state benefits programs. And yet this addition, according to the law, will end "before or on July 31, 2020."

July 31 falls on Friday, which is a problem because states usually pay unemployment benefits for the weekly cycle, which ends on Saturday or Sunday. And because of the wording of the CARES Act, this means that states will stop making additional payments of $ 600 on July 25 or 26 (depending on how the weekly payments are set in each state), and not on the very last day of the month, as many had expected.

“If the pay week ends on July 31st (Friday), then $ 600 cannot be applied for that week as most benefits are paid on Saturday or Sunday,” says Michelle Evermore, senior policy analyst at the National Employment Bill Draft. Evermore adds that she was unable to find a single state paying unemployment benefits on Friday.

On the subject: How to keep getting unemployment benefits if you are back at work

According to the Department of Labor, some 33 million Americans are still receiving unemployment benefits or awaiting approval. Thus, as soon as the extra $ 600 runs out, unemployed Americans will be given unemployment compensation, which their staff usually pays. Its size can vary significantly from state to state. Last year, the Department of Labor reported that unemployment benefits accounted for approximately 45% of national average wages.

In dollar terms, the Brookings Institution estimated the average weekly payment nationwide was $ 387 before the pandemic. In Mississippi, for example, payments averaged $ 215 per week, while in Arizona it averaged $ 240 per week. And Massachusetts residents received an average of $ 550 per week.

“This is going to be a real shock to people, especially in states like Arizona, where the cost is $ 240 a week,” says Evermore. "I doubt anyone can afford to rent an apartment in Phoenix for that kind of money."

“I think most people think that $ 600 will be canceled when they are not unemployed, and it will not affect them. But when 30 million people no longer receive the extra $ 600, it will have an impact on the entire economy, ”says Evermore.