The emergency benefit payments ordered two weeks ago by President Donald Trump are just starting to trickle into jobless Americans’ wallets.
Participation is up to individual states, and as of Monday just two -- Arizona and Texas -- had begun paying out the supplemental $300 a week in benefits. Of the other states that have received funding for the program, Missouri hopes to start paying by this weekend; Utah and New Mexico anticipate it will be a few weeks before payments reach residents; Colorado is targeting mid-September; Iowa didn’t provide a timeline; and Louisiana didn’t respond to requests for comment, though it said on Aug. 19 it expected to distribute benefits “within the next week.”
Approved States
As of Monday, 30 states had been approved for the program, with updates occurring daily. South Dakota publicly said it won’t participate.
The partial, gradual rollout limits the immediate impact of Trump’s stopgap action to provide $300 a week in additional federal aid for most jobless claimants, leaving families in a lurch as they wait for the supplemental income and holding back the economy more broadly. Lawmakers have failed to reach agreement on extending $600-a-week supplemental benefits, which expired in July and helped bring some semblance of regional equity to America’s patchwork social safety net.
Part of the reason for the slow start is that implementing the new program, known as Lost Wages Assistance, falls on overwhelmed state unemployment offices that have already struggled to process applications and deliver benefits during the pandemic. Another complication is that the program’s funding is coming from disaster money at the Federal Emergency Management Agency, an agency state officials are not accustomed to working with for unemployment-insurance matters.
The program requires working with a new agency and creating a new system with new rules and new reporting requirements, said Bill McCamley, head of the New Mexico Department of Workforce Solutions.
“If we don’t follow the rules correctly, we could be penalized in the future,” he said.
Tax Confusion
That’s what happened to some extent earlier this year when states tried to quickly implement a new federal program -- Pandemic Unemployment Assistance, or the federal program that extends jobless benefits to those not traditionally eligible like gig workers and the self-employed.
In New Mexico, the state launched the PUA program allowing applicants to use their 2018 tax information, but learned a week later that applicants had to use 2019 information instead. In other cases, confusion over how PUA recipients needed to certify or who qualified for the new aid led to other problems for states.
If, for example, a state paid out PUA benefits for a week the unemployed recipient shouldn’t have received payment for, the benefits have to be recouped, said Michele Evermore, a senior policy analyst at the National Employment Law Project. That means reclaiming money from people who have often already spent it.