Please ensure Javascript is enabled for purposes of website accessibility

Even If Boosted Unemployment Benefits Are Extended, Recipients Could Face Delays in Getting That Extra Cash

By Maurie Backman – Jul 18, 2020 at 9:18AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Lawmakers are fighting to keep the weekly $600 boost in play. But if that doesn't happen quickly, there could be a gap in getting that money into the hands of the people who need it.

Will boosted unemployment benefits continue past July? It's the question on every jobless worker's mind.

Without the $600 weekly boost that's currently in play, the typical unemployment recipient will be in line for just $380 a week, and if that comes to be, millions of Americans will inevitably struggle to make ends meet.

It's for this reason that some lawmakers have been pushing to extend boosted unemployment benefits beyond July 31, when they're set to expire. But other lawmakers are pushing back, stating that boosted unemployment isn't a good idea for a few reasons:

  • The economy is opening back up.
  • The jobless rate has fallen since April.
  • The $600 weekly boost disincentivizes workers to return to a job.

These arguments, however, hold less water now that the COVID-19 outbreak is surging again. As cases climb and more states impose added restrictions, the economy is likely to regress and the jobless rate is likely to climb. And while it's true that workers may, indeed, prefer to stay unemployed as long as they're getting an extra $600 a week, the reality is that many jobless folks don't have a role to return to.

Man at laptop resting fist on chin

Image source: Getty Images.

When lawmakers reconvene in July to discuss a second COVID-19 relief package, the topic of extending boosted unemployment is apt to come up. But even if that weekly $600 boost is extended, those who are currently collecting it may be in for a financial shock when they realize that extra money could be subject to delays.

Lawmakers need to act quickly

The CARES Act states that boosted unemployed benefits will expire on or before July 31. And most states will likely be erring on the side of "before."

The reason? Unemployment benefits are typically paid on a weekly cycle that ends on a Saturday or Sunday. This means that the $600 weekly boost will generally run out on either July 25 or July 26. Extending the boost beyond that point without changing payment cycles would mean bleeding into August.

If lawmakers don't come to an agreement to extend boosted benefits ahead of July 25, even if they do agree to keep that extra $600 in play, it could take weeks to reauthorize that additional aid, leaving unemployed workers with a gap for several weeks' time. As such, those depending on boosted unemployment should prepare now for the possibility that their benefits could drop temporarily.

Americans need that added relief

Democratic lawmakers have called to extend boosted unemployment through the end of the year. Whether that happens is yet to be determined, but it's clear that if that boost is taken away by August, the consequences will be dire. Not only will millions of Americans risk falling behind on essential expenses like rent, but they'll also have less money to pump into the economy at a time when an uptick in spending is desperately needed to break out of our current recession.

If lawmakers do vote to extend boosted unemployment, let's hope they act quickly. Otherwise, many jobless Americans will suffer for no good reason.

The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.