Thursday, November 12, 2020

Many Millions could lose unemployment benefits at the End of 2020

by Calculated Risk on 11/12/2020 01:43:00 PM

In addition to regular weekly unemployment claims, there are two COVID related programs that end on December 26th.

The first is the Pandemic Unemployment Assistance (PUA) Program. This is a special program that provides up to 39 weeks of benefits for business owners, self-employed, independent contractors or gig workers not receiving other unemployment insurance.

PUA is not payable for any week of unemployment ending after December 31, 2020. Accordingly, in states where the week of unemployment ends on a Saturday, the last week that PUA may be paid is the week ending December 26, 2020. For states where the week of unemployment ends on a Sunday, the last week that PUA is payable is the week ending December 27, 2020.
As of October 24th - the most recent report - there were 9,433,127 receiving PUA benefits (there are questions about these numbers).

The second is the Pandemic Emergency Unemployment Compensation (PEUC) Program. This program "provides up to 13 additional weeks of benefits to individuals who have exhausted their regular unemployment compensation (UC) entitlement". Just like the PUA, this program ends on December 26th. There are currently 4,143,389 people receiving these extended benefits, and this has been increasing sharply. On October 1st, about 1.8 million people were receiving benefits from the PEUC, so this has most than doubled over the last month as people exhaust their regular benefits.   This number will probably continued to increase over the next month.

Note that if people get laid off again, as COVID surges, many more people could exhaust their regular benefits.

So there is a significant fiscal cliff looming at the end of December.

Meanwhile, it is looking less likely that another disaster relief package will be passed before the end of the year.  Goldman Sachs noted today:
We continue to expect Congress to approve additional fiscal support in the range of $1 trillion, but political and vaccine-related developments make this more likely to come in early 2021 than in the lame-duck session of Congress
A surging pandemic and no disaster relief will make for a very hard winter. Hopefully some sort of relief will be passed in the lame-duck session.