Workers on Extended Benefits May Not Be Eligible for Some Pandemic Unemployment Benefits Right Away

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The $900 billion stimulus package expected to become law this week extends several key federal unemployment programs, including adding another 11 weeks of aid under the Pandemic Emergency Unemployment Compensation program. With the extension, workers may qualify for up to 24 weeks of federally funded PEUC benefits if they've exhausted their state aid.

However, individuals experiencing long-term joblessness who've exhausted their state aid as well as PEUC (an average of 39 weeks combined in 2020) may have since moved into their state's Extended Benefits program. These workers will be required to draw those funds down before they can move into the new PEUC window — and for some that might mean missing out on the extra unemployment benefits.

EB is provided on a state-by-state basis and ranges from six to 20 weeks of additional aid, based on state economic indicators. Around 700,000 workers were receiving EB in 27 states at the end of November, according to the Department of Labor.

This could be a problem for someone currently on EB but who still needs jobless aid by April 2021, after the PEUC extension ends, says Employ America policy advisor Elizabeth Pancotti.

For example, take someone in California who started collecting EB last week. They're entitled to 20 weeks of extra aid, which will take them into the end of April. The latest extension of PEUC expires on March 14, 2021 for new applicants, and by April 11, 2021 for continued claims that haven't exhausted their aid. If the California resident is still unemployed at the end of April when their EB runs out, they've missed the window for the extended pandemic program, which leaves them unable to collect any further unemployment benefits.

Under the CARES Act, workers were eligible to exhaust their PEUC benefit before they would automatically move into EB offered by their state, which has rolling expiration dates. With the text laid out in the new bill, "the order is bad," Pancotti tells CNBC Make It.

An estimated 3 million workers may automatically move to EB this weekend as states work to reinstate the renewed PEUC after Dec. 27, per the new bill. Pancotti says these workers will likely be able to move back to PEUC for their additional weeks into the new year before they revert back to their state's EB. But for anyone already in EB for a week or longer may not be able to see the PEUC for several more months, if at all.

There is some good news: People on EB will still get the extra $300 weekly federal boost from the latest relief package.

Workers unemployed for more than a year can continue benefits without pay decrease

People who do newly qualify for — or extend — their existing PEUC in 2021 may end up being able to draw benefits for more than a year without experiencing a reduction in pay.

Traditionally, when someone files for unemployment, they become eligible to draw benefits for a number of weeks determined by their state, within a 52-week time period. If they are still out of work after a year, they must reapply for a new benefit amount based on intermittent earnings they made the year prior. Andrew Stettner, a senior fellow with The Century Foundation, estimates the drop takes the average worker's estimated benefit from $320 per week to $125.

With the latest bill, however, someone drawing from PEUC who passes their one-year jobless mark can continue to receive benefits at the same rate if re-calculating their benefit would decrease their aid by $25 or more. After PEUC expires, workers will still have access to regular unemployment insurance for the remainder of their new benefit year, Pancotti says.

With the latest extension, PEUC expires for new applicants by March 14, 2021, and phases out for people who haven't exhausted their total 24 weeks of supplemental aid by April 11. The package also extends Pandemic Unemployment Assistance by another 11 weeks, adds a $300 weekly boost to all jobless aid and an extra $100 to people with mixed 1099 and W-2 incomes and says workers overpaid in pandemic aid may not have to return the funds.

However, lawmakers, particularly Democrats, likely will not wait long to seek more aid. On Monday, Senate Minority Leader Chuck Schumer (D-N.Y.) called it "a good bill" but said it "cannot be the end of the story." President-elect Joe Biden has previously referred to the latest stimulus deal as a "down payment" and expressed plans to push for another round of relief after he takes office on Jan. 20, 2021.

Check out:

New coronavirus relief bill includes $600 stimulus checks, $300 enhanced unemployment insurance

Millions of unemployed Americans will get a $300 per week federal UI boost through March with new stimulus bill

Some workers will get an extra $100 on top of new $300 weekly unemployment boost

Workers overpaid in pandemic unemployment may no longer have to return the money

Millions of workers will have to submit new documents for pandemic unemployment in 2021

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