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This extra $ 600 unemployment profit may finish before many assume

President Donald Trump discussed a proposed round of federal economic stimulus with House of Representative Minority Leader Kevin McCarthy, R-Calif, at the Oval Office on Monday. (Left), and Senate Majority Leader Mitch McConnell, R-Ky. (Center).

Photo by Doug Mills / Getty Images

Increased unemployment benefits are likely to end sooner than many may think. This could create financial difficulties for millions of families at the end of the month.

The CARES Law, the federal coronavirus law passed in March, granted Americans who received unemployment benefits an additional $ 600 a week through July 31.

In all states, however, this subsidy ends this weekend – July 25th or 26th – unless Congress passes legislation to extend the schedule beforehand, which seems increasingly unlikely.

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"I don't think people realize that they will benefit from it in the last week of July," said Michele Evermore, senior policy analyst at the National Employment Law Project, who said many are likely to be dependent on these rental payments. Mortgages and other end-of-month bills.

"I think it will be an undesirable shock," she said.

Payments end about a week earlier than the CARES law allows, based on the administrative calendar that states use to pay benefits.

The states pay the aid according to the schedule of a "performance week".

All states have performance weeks that end on a Saturday or Sunday. But July 31st falls on a Friday.

That means states will have to stop paying the $ 600 after this weekend to comply with the CARES law, which requires the subsidy to end on or before July 31.

According to the latest data from the US Department of Labor, approximately 32 million Americans received unemployment benefits as of June 27.

They would continue to receive standard government benefits that averaged $ 383 per week in the first quarter of this year, according to the ministry. This amount would mean a reduction in aid of around 61%.

"Hard decisions"

In the meantime, the federal legislature is debating the contours of another corona virus aid package.

Democrats have called for an extension of the $ 600 weekly unemployment benefit. The Republicans have signaled that these payments should be stopped.

It is unclear what, if any, would take their place if they disappeared, but some Republicans have proposed a cash bonus for people who find new jobs or a reduced amount of help.

If no laws are passed this weekend, the $ 600 a week increase in unemployment would effectively lapse.

Every week in which they do not receive these payments after July 25th or 26th, workers and their families have to make difficult decisions.

Ernie Tedeschi

Labor economist at Evercore ISI

Kevin McCarthy, chairman of the minority of the House of Representatives, R-Calif., Does not expect the laws to be passed until the first week of August, he told CNBC on Tuesday.

"Every week in which they do not receive these payments after July 25th or 26th, workers and their families have to make difficult decisions about which spending to cut, and that will have an impact on the economy and the economy." Recovery, "said Ernie Tedeschi, labor economist at Evercore ISI.

Congress can retrospectively determine the federal unemployment benefits included in the next bill, which means that recipients can receive reimbursement for weeks back in late July or early August.

However, this could mean that Americans have to endure a few weeks of financial difficulties before they get well, Tedeschi said.

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