Team Management

Updates to Unemployment Benefits Under the New COVID-19 Relief Deal

Gusto Editors  
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As the COVID-19 pandemic continues, alarming unemployment numbers across the U.S. are reported, week after week. Under the CARES ACT, the government released pandemic-specific unemployment assistance—but those benefits were set to expire at the end of the year and for many, they weren’t enough. 

On December 27, 2020 President Trump signed a new bill into law called the Consolidated Appropriations Act, 2021. Unemployment benefits were extended within the new bill. (Keep in mind: this post will cover the federal program; for state-specific pandemic unemployment benefits, see this post.)

Here are the programs in a nutshell (we’ll get into more detail in the article below): 

Pandemic Unemployment Assistance (PUA)Extends unemployment insurance to those who may not have been eligible before COVID-19 (like freelancers and self-employed individuals)
  • Generally, up to 79 weeks of coverage (certain states get up to 86 weeks)
  • Expires after September 6, 2021
Pandemic Emergency Unemployment Compensation (PEUC)Extends unemployment benefits after state unemployment benefits have been exhausted
  • Up to 53 weeks of coverage
  • Expires after September 6, 2021
Federal Pandemic Unemployment Compensation (FPUC)Provides additional money (from a federal fund) on top of regular state unemployment benefits
  • $300 per week
  • Expires after September 6, 2021

The new legislation also made some adjustments to certification requirements (in other words: how an individual must prove they are eligible to receive benefits) and to certain overpayment standards. 

Let’s dive into the details. 

Pandemic Unemployment Assistance (PUA)

Under the new bill, PUA has been extended.

Anyone applying for new PUA benefits may do so until March 14, 2021, and a person who has already been receiving benefits may continue to receive them through April 5, 2021 (as long as the maximum number of weeks hasn’t been reached). 

The maximum number of weeks a person can receive benefits has been increased from 39 weeks to 50 weeks of coverage. Benefits are available retroactively to December 1, 2020. 

PUA is a program created under the CARES Act last spring and expanded eligibility for unemployment to more workers during the pandemic.

Who is eligible for PUA?

PUA is not the same as unemployment insurance (UI); it is a separate benefit—and those who are eligible for UI will not be eligible for PUA.  

Under PUA, the following workers are eligible for unemployment benefits:

In order to be eligible for PUA, proof must be provided that the applicant is available and able to work—and that the applicant is unemployed or partially employed as a direct result of the COVID-19 pandemic. Eligible circumstances include:

  • Being diagnosed with COVID-19
  • Experiencing symptoms of COVID-19 along with demonstrated attempts to get tested 
  • Living in a home with someone who has been diagnosed with COVID-19
  • Providing care for someone who has been diagnosed with COVID-19 or providing care for someone who can’t go to school or a facility because it has been closed due to COVID-19
  • Being in quarantine 
  • Being unable to commute to a job due to COVID-19
  • Having lost a job or having been forced to quit due to COVID-19
  • Having become the primary earner for a household because the previous head of household passed away from COVID-19

The following workers are NOT eligible for PUA:

  •  undocumented workers 
  • workers who are able to work remotely
  • Those who are eligible for and/or receiving unemployment insurance 

How much can a worker expect to get from PUA?

PUA benefits amounts are calculated based on a worker’s previous earnings; at a minimum, PUA will be 50% of the average weekly benefit offered by the worker’s state (typically around $190 a week). 

How can someone apply for PUA?

Submit your application through your state website. Also, note that  beginning January 31, 2021 new applicants for PUA will be required to  submit documentation to prove employment or self-employment within 21 days. 

Pandemic Emergency Unemployment Compensation (PEUC)

PEUC is a program that was created last spring and included in the CARES Act. PEUC extends unemployment insurance, allowing those who have exhausted UI to continue to receive coverage.

Anyone applying for new PEUC benefits may do so until March 14, 2021, and a person who has already been receiving benefits may continue to receive them through April 5, 2021 (as long as the maximum number of weeks hasn’t been reached). 

The number of weeks individuals can claim PEUC benefits has increased from 13 to 24, and benefits are available retroactively to December 1, 2020. 

Who is eligible for PEUC?

To be eligible for PEUC, a worker must:

  • Be able and available to work
  • Be actively seeking work (note there is some flexibility here; certain state’s have different requirements around the active pursuit of work; if COVID-19 has limited an individual’s ability to look for work, certain state find that acceptable and the individual will remain eligible)
  • Have exhausted unemployment benefits  

How much can a worker expect to get from PEUC?

The benefit amount will remain the same as the amount the worker received from unemployment insurance. 

How can someone apply for PEUC?

Just like with PUA, you can submit your application through your state website

Federal Pandemic Unemployment Compensation (FPUC) 

Like the other pandemic unemployment benefits programs, FPUC was established by the CARES act and enables those collecting unemployment insurance to get a supplemental amount of money each week added to their unemployment benefit payment. 

The new bill restores the FPUC supplement to all state and federal unemployment benefits at $300 per week for Americans who are out of work due to circumstances created by COVID-19. 

The bill also extends the program; the new FPUC program starts on December 26th, 2020 and ends on March 14, 2021.

A recipient is eligible to receive this as long as they are eligible to receive unemployment and there is no application process. The FPUC payment will be automatically added on top of a worker’s regular unemployment payment. 

How will these unemployment benefits affect employer taxes? 

While none of the benefits listed above will affect an employer’s payroll taxes, in certain states if an employer has laid off or terminated workers, taxes that contribute to SUI may increase. Understand if you live in a state in which you will be affected by reading this 2020 state-by-state SUI guide

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