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12 Million People Could Lose Unemployment Benefits on Dec. 26

Extended payments may still be available after that date in 17 states

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In the middle of the holiday season, millions of Americans could lose the unemployment benefits that have helped them stay afloat while businesses have shuttered to deter the spread of COVID-19. Although some of those workers may be eligible for extended benefits from their states, most will lose that source of income altogether unless lawmakers act.

To soften the financial impact that the coronavirus pandemic is having on workers, Congress beefed up job-loss benefits in the stimulus legislation it passed in the spring. Out-of-work Americans were able to collect unemployment benefits longer than the states typically allow and people who otherwise wouldn't qualify became eligible for the financial assistance.

Where Extended Benefits might still be available

After December, some states — and the District of Columbia — may still be offering aid through a long-term unemployment program called Extended Benefits (EB), which existed before the coronavirus stimulus law was passed. EB kicks in when the overall unemployment rate within in a state is high. According to the Century Foundation report, those states could include:

  • Alaska
  • California
  • Connecticut
  • District of Columbia
  • Georgia
  • Hawaii
  • Illinois
  • Louisiana
  • Massachusetts
  • Nevada
  • New Jersey
  • New Mexico
  • New York
  • North Carolina
  • Oregon
  • Pennsylvania
  • Rhode Island
  • Washington

But the expanded benefits that the stimulus law provided will expire by the end of this year. That means that nearly 12 million people could lose their benefits on Dec. 26, according to a new report from the Century Foundation. That loss of income will hit just as the coldest part of the winter season begins and as more cities and states start to temporarily shut down businesses as coronavirus infection rates soar. The Labor Department reported Thursday that 742,000 people filed new claims for job-loss benefits last week, up from 711,000 the previous week and the first time that this statistic has risen in more than a month.

"The unemployment rate for aging Americans is more than double than where it was in February, prior to the COVID-19-induced recession,” says Elizabeth Pancotti, coauthor of the report and senior adviser at Employ America, an advocacy group that supports policies to improve the nation's labor market. “Workers over 50 are less likely to become reemployed after a bout of long-term unemployment, and they are more likely to drop out of the labor force entirely. Absent an extension of unemployment benefits … many Americans 50 and older will be without employment prospects and without income."

The report offers a sobering analysis of how many people could lose benefits based on the program in which they are currently enrolled.

  • Pandemic Emergency Unemployment Compensation (PEUC) This program was designed to offer 13 more weeks of benefits to people who have exhausted their eligibility for their state's standard unemployment insurance program. But those who recently entered this program won't get the full 13 weeks; they'll be able to collect the benefit only until the end of December. The Century Foundation estimates that 4.65 million people will lose this benefit in December, with heavy losses coming in California, Georgia, Illinois, Massachusetts, Michigan, New York, Pennsylvania and Texas.
  • Pandemic Unemployment Assistance (PUA) Congress created this benefit to make it possible for gig workers and others who might not otherwise qualify for unemployment assistance to get benefits during the pandemic. But PUA also covers some traditional workers who have exhausted their eligibility to collect other types of unemployment benefits. The report says 7.3 million people could lose this benefit in December, particularly in California, Massachusetts Michigan, New York, Ohio, Pennsylvania and Texas.
  • Extended Benefits Stimulus laws didn't create this benefit, but it is available only to people who have been out of work long term in states where unemployment is high. The Century Foundation report estimates that 17 states and the District of Columbia will be offering extended benefits after December, depending on what the unemployment rate for the state is at that time. Those states are projected to be Alaska, California, Connecticut, Georgia, Hawaii, Illinois, Louisiana, Massachusetts, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island and Washington.

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It's up to federal lawmakers to decide whether to continue PEUC and PUA after the end of December or create new, comparable benefits. Congress has been unable to reach a bipartisan agreement on new stimulus legislation since last spring, and it may not resume meaningful negotiations until after the presidential inauguration, on Jan. 20. That could leave many older adults without any income for a month or more.

"People are already starting to burn through their savings with the insufficient unemployment insurance amount that they have,” says Michele Evermore, an unemployment-insurance expert for the National Employment Law Project. “It'll be a double storm by the time we hit December 26. Not only will their income fall off to zero, but because unemployment insurance benefits are too small and they've been relying just on that for months now, their resources are already depleted."

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