The Coronavirus Aid, Relief and Economic Security Act (CARES), which was signed into law on March 27, 2020, provided $268 billion for expanded unemployment insurance benefits provided through three programs:
- The Federal Pandemic Unemployment Compensation (PUC) provided weekly supplemental benefits of $600 for people that received unemployment benefits for weeks of unemployment between April 5, 2020, and July 31, 2020.
- The Pandemic Unemployment Assistance (PUA) program temporarily provided unemployment benefits to people unable to work for reasons related to COVID-19 who were not usually eligible for unemployment assistance, including the self-employed, independent contractors, and those with limited work. This program paid for up to 39 weeks of unemployment benefits between January 27, 2020 and December 31, 2020.
- The Pandemic Emergency Unemployment Compensation (PEUC) program provided an additional 13 weeks of unemployment benefits to people who had exhausted all available regular and extended unemployment benefits through December 31, 2020.
The Coronavirus Response and Relief Supplemental Appropriations Act of 2021, which was signed into law on December 27, 2020, included an 11-week extension of unemployment insurance (UI) compensation benefits that were provided in the CARES Act and were set to expire in December 2020. This extension included the Federal PUC, which provided an additional $300 per week supplement to state UI compensation (down from the $600 payments in the program under the CARES Act), as well as the PUA and PEUC programs.
The American Rescue Plan Act of 2021, which was signed into law on March 11, 2021, further extended unemployment support programs. The PUA was extended through September 6, 2021, increasing the total number of weeks available for unemployment benefits from 50 to 79 weeks for self-employed people and other unemployed people deemed ineligible for state UI benefits. The PEUC program was extended through September 6, 2021, increasing eligibility for PEUC benefits from 24 to 53 weeks. The PUC program was also extended through September 6, 2021 and will provide an additional $300 per week supplement to state UI compensation The act also exempted the first $10,200 in 2020 unemployment benefits from federal income tax for households with incomes below $150,000 per year.
In the NIPAs, unemployment insurance benefits are classified as federal social benefits to persons regardless of whether they are financed by the unemployment trust fund or by separate federal appropriations. Social benefits are published as a component of federal government expenditures on line 28 of NIPA Table 3.2 and as a component of personal income on line 17 of NIPA Table 2.1 and NIPA Table 2.6. Quarterly values of unemployment benefits are also published on NIPA Underlying Detail Table 3.12U. Specifically, regular and extended unemployment benefits, including benefits paid to people eligible through the PUA program, and the value of supplemental PUC payments are included on line 8 and PEUC benefits are included on line 11. BEA's estimates of unemployment benefits are based on weekly data on the number of people claiming regular state benefits, PUA benefits, and PEUC benefits from the Department of Labor's Employment and Training Administration.
The Families First Coronavirus Response Act (FFRCA), which was signed into law on March 18, 2020, provided $4.7 billion in additional funding to state governments to administer unemployment programs and to fund benefit payments. Specifically, the funding included:
- Emergency administrative grants to states to fund activities related to processing and paying unemployment insurance benefits. To receive these grants, states had to meet specified criteria, including waiving one-week waiting periods and work search requirements.
- The federal government funded 100 percent of the cost of extended unemployment benefits through December 2020 for states that received emergency administrative grants. Usually, the federal government funds 50 percent of these benefit costs.
A presidential memoranda that was issued on August 8, 2020 authorized $44 billion in spending from the Federal Emergency Management Agency's Disaster Relief Fund (DRF) for Lost Wages Assistance (LWA) payments. Similar to the PUC benefits authorized by the CARES Act, LWA benefits were $300 weekly supplemental payments for people who were already receiving at least $100 in weekly unemployment benefits. LWA benefits could be claimed for weeks of unemployment from July 26, 2020 until the funds were exhausted. In the NIPAs, benefits paid from the Disaster Relief Fund are included in other social benefits on line 23 of NIPA Table 2.1 and NIPA Table 2.6 and on line 26 of NIPA Underlying Detail Table 3.12U.
The distribution of LWA benefits was administered by state unemployment offices and states could use up to 5% of DRF funds to cover administrative costs, subject to cost sharing requirements. While unemployment benefits are classified as federal social benefits in the NIPAs, the administrative expenses of the state governments that administer the unemployment insurance programs are included in estimates of state and local government output and consumption expenditures. Federal grants to the states to fund the administration of these programs are recorded as federal government current expenditures on line 31 of NIPA Table 3.2 and as state and local government current receipts on line 18 of NIPA Table 3.3.