Congressional Research Service IF11786.3 (Unemployment Insurance Provisions in the American Rescue Plan Act of 2021)
Summary
A Congressional Research Service product, IF11786 (version 3), updated March 17, 2021, on the unemployment insurance (UI) provisions in Title IX, Subtitle A, of the American Rescue Plan Act of 2021 (ARPA; P.L. 117-2; enacted March 11, 2021). It states that ARPA makes four significant changes to UI programs and benefits, including reauthorizing and expanding enhanced UI benefits created under the CARES Act and the Consolidated Appropriations Act, 2021. It traces Federal Pandemic Unemployment Compensation (FPUC), originally authorized at $600 per week and first expiring on July 25, 2020, the Lost Wages Assistance grant program created by presidential memorandum on August 8, 2020, and the reauthorization of FPUC at $300 per week for weeks of unemployment beginning after December 26, 2020.
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Updated March 17, 2021
Unemployment Insurance Provisions in the American Rescue
Plan Act of 2021
The Unemployment Insurance (UI) provisions in Title IX, Federal Pandemic Unemployment Compensation
Subtitle A, of the American Rescue Plan Act of 2021 Originally authorized under the CARES Act at $600 per
(ARPA; P.L. 117-2; enacted March 11, 2021) make four week, FPUC is a weekly UI benefit augmentation that
significant changes to UI programs and benefits— initially expired on July 25, 2020 (July 26, 2020, in New
specifically, ARPA York; for subsequent UI benefit expiration dates provided
below, the benefit expiration date in New York falls one
reauthorizes and expands the enhanced UI benefits calendar day later, which is due to that state’s definitions of
created under the Coronavirus Aid, Relief, and week). After this expiration, on August 8, 2020, former
Economic Security Act (CARES Act; P.L. 116-136, President Trump issued a presidential memorandum
enacted March 27, 2020) and the Consolidated creating Lost Wages Assistance, a grant program that
Appropriations Act, 2021 (P.L. 116-260, enacted supplemented the weekly benefits of certain eligible UI
December 27, 2020; the UI provisions are titled the claimants with up to $300 weekly in federal funding. All
Continued Assistance for Unemployed Workers Act of states ended Lost Wages Assistance payments by
2020 [Continued Assistance Act]); September 5, 2020. The Continued Assistance Act
reauthorized FPUC at $300 per week for weeks of
extends the authorization for additional, temporary UI unemployment beginning after December 26, 2020, and
provisions first authorized under the CARES Act and ending on or before March 14, 2021.
the Families First Coronavirus Response Act (FFCRA;
P.L. 116-127, enacted March 18, 2020) and extended ARPA extends the Continued Assistance Act’s
under the Continued Assistance Act; reauthorization of FPUC at $300 per week through weeks
of unemployment ending on or before September 6, 2021.
authorizes a federal income tax exclusion of up to After September 4, 2021, no FPUC benefits are payable.
$10,200 in UI benefits in 2020 for taxpayers with
modified adjusted gross income (AGI) of less than Pandemic Emergency Unemployment
$150,000; and Compensation
PEUC provides additional weeks of federally financed UI
provides two sources of additional UI administrative benefits for individuals who exhaust state and federal UI
funding: (1) $2 billion to U.S. Department of Labor benefits and are able, available, and actively seeking work,
(DOL) for federal and state administration of UI subject to flexibilities related to Coronavirus Disease 2019
benefits, including for fraud prevention and benefit (COVID-19). PEUC was originally created as a 13-week UI
processing purposes; and (2) $8 million to DOL for extension under the CARES Act and payable through
federal activities related to UI programs . weeks of unemployment ending December 26, 2020.
For additional information on UI programs and benefits, see The Continued Assistance Act subsequently authorized 11
CRS Report R46687, Current Status of Unemployment additional weeks of PEUC benefits (for a total of 24 weeks;
Insurance (UI) Benefits: Permanent-Law Programs and the additional weeks were only payable beginning
COVID-19 Pandemic Response. December 26, 2020) and extended the authorization for
PEUC through weeks of unemployment ending on or before
For information on federal taxation of UI benefits, see CRS March 14, 2021.
In Focus IF11782, Federal Taxation of Unemployment
Insurance Benefits. The American Rescue Plan Act
Reauthorized and Expanded Federal UI authorizes 29 additional weeks of PEUC benefits (not
Benefits retroactive; only payable with respect to weeks of
The UI provisions in ARPA reauthorize and expand the unemployment beginning March 14, 2021); and
four temporary UI benefits created under the CARES Act
and the Continued Assistance Act: Federal Pandemic extends the authorization for PEUC through weeks of
Unemployment Compensation (FPUC), Pandemic unemployment ending on or before September 6, 2021;
Emergency Unemployment Compensation (PEUC), no PEUC benefits are payable after September 4, 2021.
Pandemic Unemployment Assistance (PUA), and Mixed
Earned Unemployment Compensation (MEUC). The new PEUC expiration date effectively limits PEUC
benefits to no more than an additional 25 weeks and a
cumulative total of 49 weeks.
https://crsreports.congress.gov
Unemployment Insurance Provisions in the American Rescue Plan Act of 2021
Pandemic Unemployment Assistance benefits through temporary assistance for states with
PUA is a temporary, federal UI program for individuals advances;
who are (1) not otherwise eligible for UI benefits (e.g., self-
employed, independent contractors, gig economy workers); 100% federal funding of Extended Benefits (EB);
(2) unemployed due to a specific COVID-19-related reason; 100% federal funding for the first week of UI benefits in
and (3) not able to telework and are not receiving any paid states with no waiting week (originally 100% federal
leave. funding under CARES Act, then 50% funding under the
Continued Assistance Act; restored 100% federal
Under the CARES Act, PUA provided up to 39 weeks of funding under ARPA is retroactive and applies as if the
benefits for weeks of unemployment ending December 26, reduction to 50% funding had not occurred);
2020. The Continued Assistance Act subsequently
authorized 11 additional weeks of PUA benefits (for a total 75% federal funding of state UI benefits based on
of 50 weeks; the additional weeks were only payable service with reimbursing employers (i.e., state and local
beginning December 26, 2020) and extended the governments, Indian tribes, and nonprofit organizations,
authorization for PUA through weeks of unemployment including the Kennedy Center, that have opted not to
ending on or before March 14, 2021. pay UI taxes but instead reimburse states for regular UI
benefits paid to their former employees ; previously 50%
The American Rescue Plan Act federal funding under the CARES Act and the
Continued Assistance Act—75% funding begins for
authorizes 29 additional weeks of PUA benefits (not weeks of unemployment after March 31, 2021);
retroactive; only payable with respect to weeks of
100% federal financing of Short-Time Compensation
unemployment beginning March 14, 2021); and
(STC; work sharing) in states with existing programs
extends the authorization for PUA through weeks of and 50% federal financing for states that set up STC
programs (up to the equivalent of 26 weeks of benefits
unemployment ending on or before September 6, 2021;
for individuals); and
no PUA benefits are payable after September 4, 2021.
waiver of federal requirements regarding merit staffing
The new PUA expiration date effectively limits PUA for state UI programs on an emergency, temporary basis
benefits to no more than an additional 25 weeks and a in response to COVID-19 (limited to certain temporary
cumulative total of 75 weeks. actions taken by states to quickly process UI claims,
including rehiring former employees and temporary
Mixed Earner Unemployment Compensation hiring).
The Continued Assistance Act created a $100-a-week
MEUC payment in addition to the $300-a-week FPUC UI Tax Exclusion for 2020
benefit in states that elect to participate. MEUC provides ARPA allows taxpayers to exclude up to $10,200 in UI
$100 weekly for individuals who received at least $5,000 in benefits from income in 2020 for the purposes of federal
self-employment income in the most recent tax year (i.e., income, for taxpayers with modified AGI of less than
ending prior to the individual’s application for state UI $150,000. The $150,000 AGI threshold applies regardless
benefits) and receive a UI benefit other than PUA. Under of the taxpayer’s filing status (i.e., married filing jointly,
the Continued Assistance Act, MEUC was payable only in single, or head of household).
states that opt to administer the benefit for weeks of
unemployment beginning on or after December 27, 2020, Additional UI Administrative Funding
and ending on or before March 14, 2021. ARPA provides $2 billion in additional UI administrative
funding to DOL in FY2021 to “detect and prevent fraud,
ARPA extends the authorization of the $100-a-week promote equitable access, and ensure the timely payment of
MEUC payment in participating states for weeks of benefits.” This funding is available until expended and may
unemployment ending on or before September 6, 2021. be used for (1) federal administrative costs, (2) system-wide
After September 4, 2021, no MEUC benefits are payable. infrastructure, and (3) grants to states and territories
Extensions of Additional UI Provisions administering all UI benefits for program integrity and
ARPA extends the temporary authority for additional UI fraud prevention purposes, including for identity
provisions first authorized under FFCRA (P.L. 116-127) verification and faster claims processing.
and the CARES Act (P.L. 116-136) and subsequently
reauthorized under the Continued Assistance Act. The ARPA also provides an additional $8 million to DOL in
authorities for the following UI provisions are generally FY2021, available until expended, for necessary expenses
extended through September 6, 2021 (or for weeks of to carry out federal activities related to the administration of
unemployment ending on or before September 6, 2021 (i.e., UI programs.
through September 4, 2021):
Katelin P. Isaacs, Specialist in Income Security
waiver of interest payments and the accrual of interest Julie M. Whittaker, Specialist in Income Security
on federal advances (loans) to states to pay regular UI
IF11786
https://crsreports.congress.gov
Unemployment Insurance Provisions in the American Res cue Plan Act of 2021
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https://crsreports.congress.gov | IF11786 · VERSION 3 · UPDATED
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