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Will Larger Unemployment Checks Continue Past July?

By Kailey Hagen – Updated Jun 15, 2020 at 9:34AM

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There are a lot of ideas getting thrown around. Here's what you need to know.

The country is slowly reopening the economy after months of closure due to the COVID-19 pandemic. Approximately 2.5 million people returned to work in May, yet 21 million remain unemployed and the number of workers reporting permanent job loss continues to rise. Given these grim statistics, it's not surprising that people are worried about how they're going to get through the next several months.

The CARES Act, passed in March, gave an extra $600 per week to those claiming unemployment benefits above and beyond what their states offered. But these extended benefits are only in effect until July 31, 2020. With that date now about a month and a half away, the federal government must decide what happens next.

Couple holding check and looking at tablet together

Image source: Getty Images.

While some lawmakers have proposed extending the extra $600 per week through 2021, right now that's looking unlikely. But that doesn't mean all aid will cease as soon as we enter August. Legislators from both parties have proposed alternatives to support Americans in need without discouraging people from returning to work or finding new jobs. Here's what you need to know.

The HEROES Act: More stimulus checks and $600 per week through January 2021

House Democrats have recently passed the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, which proposes an additional $3 trillion stimulus package for American families and businesses. Among other things, the bill calls for another round of stimulus checks -- $1,200 for individuals and $2,400 for married couples with additional money going to those with dependents -- and extending the $600 per week in extra unemployment benefits through Jan. 31, 2021. 

But Republican lawmakers have pushed back against this idea, claiming this level of stimulus would be a disincentive for people returning to work and could possibly create a longer-term unemployment problem. Their concern has been backed up by a recent Congressional Budget Office report, which determined that extending CARES Act unemployment benefits through January 2021 would likely help the economy in the short term but would lead to lower employment in 2021 than there would be if CARES Act benefits ended in July as planned.

Senate Majority Leader Mitch McConnell has already said that the Republican-held Senate will not support any proposals to continue CARES Act unemployment benefits beyond its original end date, so it's unlikely the HEROES Act funds will actually make it into the hands of the American public. 

Return-to-work bonuses: Get paid an extra $450 per week to go back to work

Republican Senator Rob Portman has proposed an alternative solution that would incentivize returning to work in the hopes of bringing about a faster economic recovery. His proposal would still allow those claiming CARES Act unemployment benefits to continue doing so through July 31, 2020, but it would also give those who return to work before this date an extra $450 per week, in addition to their normal salaries, through the end of July. 

This approach also has its critics. With social distancing guidelines still in place and some businesses closing their doors for good due to the extended lack of income, there may not be enough jobs available at the end of July for everyone who wants one, and even those who take advantage of this return-to-work bonus can only do so for a short time.

Something in between?

There are other ideas floating around that appear to offer a middle ground, providing some support to those still unemployed while slowly removing these extra benefits over time as the economy recovers. 

Democratic Senator Ron Wyden proposed a tiered plan that would extend the extra $600 per week in unemployment benefits until a state's three-month average total unemployment rate drops below 11%. After that, the extra unemployment benefits would steadily decrease as the state's unemployment rate shrinks. 

It's impossible to say at this point which, if any, of the above plans the government will enact once the CARES Act's unemployment assistance expires at the end of July. But it's possible that some form of unemployment benefit or return-to-work bonus will be coming our way. And even if the government ultimately decides not to extend unemployment benefits any further, workers will still be eligible for their normal state benefit amount for up to 13 weeks beyond their state's normal unemployment cutoff. For most Americans, this means they can claim benefits for up to 39 weeks, even if that takes them beyond July. 

In the meantime, it's best to prepare as if there will be no additional money coming your way, just to be safe. If you're aren't using all the money you're getting from unemployment right now, set aside the extra in an emergency fund to help you through the coming months and consider seeking out new employment if you've permanently lost your job and feel comfortable returning to the workforce.

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