Several states have received federal approval to disburse an extra $300 a week in unemployment benefits, though some said it would take a few weeks before they could deliver the money to workers.
Arizona, Iowa, Louisiana, New Mexico, Colorado, Missouri and Utah were the first states to receive approval for Federal Emergency Management Agency funds to send out the enhanced unemployment benefits, according to statements on FEMA’s website this weekend and a statement from Labor Secretary Eugene Scalia Tuesday. President Trump signed an executive order earlier this month calling for the federal agency to provide the additional $300 a week.
States can choose whether to participate and must apply to FEMA by Sept. 10 if they want the money.
“I would expect that most of the states qualify…so I hope we see the majority of the states,” Treasury Secretary Steven Mnuchin said in an interview Tuesday on CNBC.
Under Mr. Trump’s order, states can also use their own funds to provide another $100 a week for a total supplemental payment of $400, though it’s unclear whether any states will do so since many face cash crunches. Governors in states such as New York and New Jersey have indicated they are unlikely to fund the extra $100. Labor officials in Utah and New Mexico said they would not pay for the additional $100.
Among the states that have received federal approval to send out the extra $300, some said they were unsure when they would be able to start delivering the money.
Officials in Utah and New Mexico said it would take a few weeks before they would be ready to start issuing the $300 benefits, and the Labor Department estimates it will take states an average of three weeks to send out the money.
“We’re basically building a brand new system with new rules and new reporting requirements with a new agency and that takes time to do right,” said Bill McCamley, secretary of New Mexico’s unemployment agency.
The additional payments will be retroactive to the week ended Aug. 1, regardless of when states are able to begin sending out the payments.
To meet the new federal guidelines for distributing the extra $300 benefit, state unemployment agencies must determine whether a person lost work due to the pandemic. Some but not all unemployment-insurance recipients have already provided such information to state labor departments.
States must also determine whether an unemployment claimant meets Mr. Trump’s requirement that only recipients of at least $100 in regular weekly unemployment benefits receive the $300 federal benefit.
Such eligibility determinations can be complex. For example, New Mexico allows unemployment-benefits recipients with dependents to receive up to an extra $50 on top of their weekly unemployment benefit. It’s unclear whether that additional $50 would count toward the $100 threshold, Mr. McCamley said.
“These sorts of questions on how to implement these new programs really show how complicated the system is,” he said.
About 6% of unemployment-insurance claimants in Colorado receive less than $100 a week and the state will need to ensure those individuals don’t receive the additional benefit, said Cher Haavind, deputy executive director of Colorado’s labor department.
“That is just one of the many programming requirements we have before us,” Ms. Haavind said. She didn’t know when Colorado would start sending out the extra aid because it was unclear whether the state would provide an extra $300 or $400.
State unemployment-insurance agencies are responsible for setting up the new program at a time when many are still paying out unemployment claims at historically high levels and addressing widespread fraud.
About 15.5 million workers were receiving unemployment benefits through regular state programs in the week ended Aug. 1, the Labor Department said last week. Before the coronavirus struck the U.S. economy in March, fewer than two million individuals were collecting unemployment benefits each week.
South Dakota Governor Kristi Noem announced that the state wouldn’t deliver any enhanced benefit under Mr. Trump’s executive order, citing the state’s jobs recovery.
“My administration is very grateful for the additional flexibility that this effort would have provided, but South Dakota is in the fortunate position of not needing to accept it,” Ms. Noem said in a statement.
States that have been approved to receive federal funds for the additional $300 benefit are initially eligible for up to three weeks of FEMA funds.
Based on the current number of unemployment-benefit recipients, federal funding allocated for the enhanced jobless benefits could run out within a month and a half if all states participated, according to a senior Labor Department official.
That time line would put the benefits on pace to expire sooner than the December termination set in Mr. Trump’s order.
Write to Sarah Chaney at [email protected]
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