If You're About to Lose Federal Unemployment Benefits, Take These 4 Steps Now
by Maurie Backman | Updated July 25, 2021 - First published on May 30, 2021
Some states are ending boosted unemployment early. Here's what to do if yours is on that list.
In mid-March, President Joe Biden signed the American Rescue Plan into law. That $1.9 trillion relief package gave unemployment benefits a $300 weekly boost through early September and allowed self-employed and gig workers to continue collecting benefits as well. (Normally, those who are self-employed aren't entitled to unemployment.)
But now, a number of states are pulling the plug on that additional jobless aid. That means some workers may soon lose their $300 weekly boost to unemployment, while self-employed and gig workers may lose their benefits entirely. If your state is among those that are cutting off that aid, here are four essential steps to take.
1. See what benefit you'll be left with
Losing your federal $300 weekly unemployment boost doesn't necessarily mean you'll be left without jobless benefits. If you're not self-employed, you should still be entitled to your regular state benefit -- though that amount will be a lot lower without that boost in play.
If you're a gig worker, you may lose your benefits completely -- or you may not, depending on your state. Do some digging to see if you'll still be eligible to collect some amount of money each week while you're out of work. You can contact your state's labor department or unemployment office for more details. This list of unemployment resources may also help.
2. Assess your savings
Having your weekly jobless benefits get slashed or disappear could be devastating. Take a look at your savings and see how long they might last. If you have a $4,000 emergency fund, for example, and you normally spend $2,000 a month on living costs, that gives you a real timeline for finding a new job before that money runs out.
3. Rework your budget to trim expenses
If your jobless benefits are taking a hit, you may need to give up certain expenses until you're gainfully employed. Now chances are, if you're unemployed, you're already following a pretty tight budget, but you may need to cut corners even more, unfortunately. That could mean downgrading your cellphone plan or being even more frugal at the grocery store until your financial situation improves. If you're on a month-to-month lease, you may want to move to a smaller or less expensive home if you can do so without spending much money (keeping in mind that even if you can move for free, this may not be a feasible option for everyone).
4. Ramp up your job search
The main reason so many states are ending boosted unemployment ahead of schedule is to encourage the jobless to go back to work. To this end, you may want to get more aggressive in your job search so you can start collecting a paycheck that's more generous than the jobless benefits you'll be left with. In addition to searching for work online, try networking. Reach out to friends, neighbors, and old colleagues to see if anyone knows of a job opening.
Of course, some jobless workers may have constraints in this regard. You may not be able to return to work right away if you don't have childcare during the day or are not yet eligible for a coronavirus vaccination. (People who had the virus recently or who have certain health conditions may need to wait.) But if you are able to take on a job, now's the time to look everywhere.
The good news is that some states are actually offering a financial incentive for workers to take a job. If you get hired in the next few months, you could have a little extra money coming your way. That may, in turn, help offset some of the expenses you incur in the course of finding work, like traveling to interviews or having to buy new attire to wear to your job.
Losing federal unemployment benefits is a harsh blow, but it's one that many jobless workers could start facing as early as June. If you're about to lose your benefits, make these key moves now -- before your weekly income shrinks.
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