Unemployment Insurance Provisions in the American Rescue Plan Act of 2021 (IF11786, Version 1)
Summary
A Congressional Research Service report, IF11786, dated March 11, 2021, on the unemployment insurance provisions in Title IX, Subtitle A of the American Rescue Plan Act of 2021. The Act would extend the $300 weekly FPUC supplement through weeks ending on or before September 6, 2021, and authorize 29 additional weeks of PEUC benefits, though its new expiration date effectively limits PEUC to a cumulative total of 49 weeks. It would exclude up to $10,200 of 2020 unemployment benefits from income tax for taxpayers with modified AGI of less than $150,000. It would also provide $2 billion to the Department of Labor for UI administration, including fraud prevention. The report recounts that the original $600 FPUC expired in July 2020 and was followed by Lost Wages Assistance of up to $300 weekly.
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March 11, 2021
Unemployment Insurance Provisions in the American Rescue
Plan Act of 2021
The Unemployment Insurance (UI) provisions in Title IX, York). After this expiration, on August 8, 2020, former
Subtitle A, of the American Rescue Plan Act of 2021 President Trump issued a presidential memorandum
(ARPA; H.R. 1319, as passed by the Senate on March 6, creating Lost Wages Assistance, a grant program that
2021, and by the House on March 10, 2021) would enact supplemented the weekly benefits of certain eligible UI
four significant changes to UI programs and benefits— claimants with up to $300 weekly in federal funding. All
specifically, ARPA would: states ended Lost Wages Assistance payments by
September 5, 2020. The Continued Assistance Act
reauthorize and expand the enhanced UI benefits created reauthorized FPUC at $300 per week for weeks of
under the Coronavirus Aid, Relief, and Economic unemployment beginning after December 26, 2020, and
Security Act (CARES Act; P.L. 116-136, enacted March ending on or before March 14, 2021.
27, 2020) and the Consolidated Appropriations Act,
2021 (P.L. 116-260, enacted December 27, 2020; the UI ARPA would extend the Continued Assistance Act’s
provisions are titled the Continued Assistance for reauthorization of FPUC at $300 per week through weeks
Unemployed Workers Act of 2020 [Continued of unemployment ending on or before September 6, 2021.
Assistance Act]); After September 4, 2021 (September 5, 2021, in New
York), no FPUC benefits would be payable.
extend the authorization for additional, temporary UI
provisions first authorized under the CARES Act and Pandemic Emergency Unemployment
the Families First Coronavirus Response Act (FFCRA; Compensation
P.L. 116-127, enacted March 18, 2020) and extended PEUC provides additional weeks of federally financed UI
under the Continued Assistance Act; benefits for individuals who exhaust state and federal UI
benefits and are able, available, and actively seeking work,
authorize a federal income tax exclusion of up to subject to flexibilities related to Coronavirus Disease 2019
$10,200 in UI benefits in 2020 for taxpayers with (COVID-19). PEUC was originally created as a 13-week UI
modified adjusted gross income (AGI) of less than extension under the CARES Act and payable through
$150,000; and weeks of unemployment ending December 26, 2020
(December 27, 2020, in New York).
provide two sources of additional UI administrative
funding: (1) $2 billion to U.S. Department of Labor The Continued Assistance Act subsequently authorized 11
(DOL) for federal and state administration of UI additional weeks of PEUC benefits (for a total of 24 weeks;
benefits, including for fraud prevention and benefit the additional weeks were only payable beginning
processing purposes; and (2) $8 million to DOL for December 26, 2020 [December 27, 2020, in New York])
federal activities related to UI programs . and extended the authorization for PEUC through weeks of
unemployment ending on or before March 14, 2021 (March
For additional information on UI programs and benefits, see 13, 2021; March 14, 2021, in New York).
CRS Report R46687, Current Status of Unemployment
Insurance (UI) Benefits: Permanent-Law Programs and The American Rescue Plan Act would:
COVID-19 Pandemic Response.
authorize 29 additional weeks of PEUC benefits (not
Reauthorized and Expanded Federal UI retroactive; only payable with respect to weeks of
Benefits unemployment beginning March 14, 2021 [March 15,
The UI provisions in ARPA would reauthorize and expand 2021, in New York]); and
the four temporary UI benefits created under the CARES
Act and the Continued Assistance Act: Federal Pandemic extend the authorization for PEUC through weeks of
Unemployment Compensation (FPUC), Pandemic unemployment ending on or before September 6, 2021
Emergency Unemployment Compensation (PEUC), (September 4, 2021; September 5, 2021, in New York);
Pandemic Unemployment Assistance (PUA), and Mixed no PEUC benefits would be payable after that date.
Earned Unemployment Compensation (MEUC).
The new PEUC expiration date would effectively limit
Federal Pandemic Unemployment Compensation PEUC benefits to no more than an additional 25 weeks and
Originally authorized under the CARES Act at $600 per a cumulative total of 49 weeks.
week, FPUC is a weekly UI benefit augmentation that
initially expired on July 25, 2020 (July 26, 2020, in New
https://crsreports.congress.gov
Unemployment Insurance Provisions in the American Rescue Plan Act of 2021
Pandemic Unemployment Assistance waiver of interest payments and the accrual of interest
PUA is a temporary, federal UI program for individuals on federal advances (loans) to states to pay regular UI
who are (1) not otherwise eligible for UI benefits (e.g., self- benefits through temporary assistance for states with
employed, independent contractors, gig economy workers); advances;
(2) unemployed due to a specific COVID-19-related reason;
and (3) not able to telework and are not receiving any paid 100% federal funding of Extended Benefits (EB);
leave.
100% federal funding for the first week of UI benefits in
Under the CARES Act, PUA provided up to 39 weeks of states with no waiting week (originally 100% federal
benefits for weeks of unemployment ending December 26, funding under CARES Act, then 50% funding under the
2020 (December 27, 2020, in New York). The Continued Continued Assistance Act; restored 100% federal
Assistance Act subsequently authorized 11 additional funding under ARPA would be retroactive and apply as
weeks of PUA benefits (for a total of 50 weeks; the if the reduction to 50% funding had not occurred);
additional weeks were only payable beginning December
26, 2020 [December 27, 2020, in New York]) and extended 75% federal funding of state UI benefits based on
the authorization for PUA through weeks of unemployment service with reimbursing employers (i.e., state and local
ending on or before March 14, 2021 (March 13, 2021; governments, Indian tribes, and nonprofit organizations,
March 14, 2021, in New York). including the Kennedy Center, that have opted not to
pay UI taxes but instead reimburse states for regular UI
The American Rescue Plan Act would: benefits paid to their former employees ; previously 50%
federal funding under the CARES Act and the
authorize 29 additional weeks of PUA benefits (not Continued Assistance Act—75% funding would begin
retroactive; only payable with respect to weeks of for weeks of unemployment after March 31, 2021);
unemployment beginning March 14, 2021 [March 15,
2021, in New York]); and 100% federal financing of Short-Time Compensation
(STC; work sharing) in states with existing programs
extend the authorization for PUA through weeks of and 50% federal financing for states that set up STC
unemployment ending on or before September 6, 2021 programs (up to the equivalent of 26 weeks of benefits
(September 4, 2021; September 5, 2021, in New York); for individuals); and
no PUA benefits would be payable after that date.
waiver of federal requirements regarding merit staffing
The new PUA expiration date would effectively limit 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 temporary actions
cumulative total of 75 weeks. taken by states to quickly process UI claims, including
rehiring former employees and temporary hiring).
Mixed Earner Unemployment Compensation
The Continued Assistance Act created a $100-a-week UI Tax Exclusion for 2020
MEUC payment in addition to the $300-a-week FPUC ARPA includes a provision that would exclude up to
benefit in states that elect to participate. MEUC provides $10,200 in UI benefits from income in 2020 for the
$100 weekly for individuals who received at least $5,000 in purposes of federal income for taxpayers with modified
self-employment income in the most recent tax year (i.e., AGI of less than $150,000. The $150,000 AGI threshold
ending prior to the individual’s application for state UI would apply regardless of the taxpayer’s filing status (i.e.,
benefits) and receive a UI benefit other than PUA. Under married filing jointly, single, or head of household).
the Continued Assistance Act, MEUC was payable only in
states that opt to administer the benefit for weeks of Additional UI Administrative Funding
unemployment beginning on or after December 27, 2020, ARPA would provide $2 billion in additional UI
and ending on or before March 14, 2021 (March 13, 2021; administrative funding to DOL in FY2021 to “detect and
March 14, 2021, in New York). prevent fraud, promote equitable access, and ensure the
timely payment of benefits.” This funding would be
ARPA would extend the authorization of the $100-a-week available until expended and may be used for (1) federal
MEUC payment in participating states for weeks of administrative costs, (2) system-wide infrastructure, and (3)
unemployment ending on or before September 6, 2021. grants to state and territories administering all UI benefits
After September 4, 2021 (September 5, 2021, in New for program integrity and fraud prevention purposes,
York), no MEUC benefits would be payable. including for identity verification and faster claims
processing.
Extensions of Additional UI Provisions
ARPA would extend the temporary authority for additional
ARPA would also provide an additional $8 million to DOL
UI provisions first authorized under FFCRA (P.L. 116-127) for necessary expenses to carry out federal activities related
and the CARES Act (P.L. 116-136) and subsequently to the administration of UI programs.
reauthorized under the Continued Assistance Act. The
authorities for the following UI provisions would generally Katelin P. Isaacs, Specialist in Income Security
be extended through September 6, 2021 (or for weeks of Julie M. Whittaker, Specialist in Income Security
unemployment ending on or before September 6, 2021; i.e.,
September 4, 2021; September 5, 2021, in New York): IF11786
https://crsreports.congress.gov
Unemployment Insurance Provisions in the American Rescue Plan Act of 2021
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https://crsreports.congress.gov | IF11786 · VERSION 1 · NEW
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