COVID-19: Supplementing Unemployment Insurance Benefits (Federal Pandemic Unemployment Compensation vs. Lost Wages Assistance)

COVID-19: Supplementing Unemployment Insurance Benefits (Federal Pandemic Unemployment Compensation vs. Lost Wages Assistance)

INSIGHTi
COVID-19: Supplementing Unemployment
Insurance Benefits (Federal Pandemic
Unemployment Compensation vs. Lost Wages
Assistance)
August 31, 2020
Among other temporary Unemployment Insurance (UI) provisions authorized under the Coronavirus Aid,
Relief, and Economic Security Act (CARES Act; P.L. 116-136; enacted March 27, 2020), Federal
Pandemic Unemployment Compensation (FPUC) provided an additional, federal y financed $600 weekly
benefit that augmented al UI benefits from March 29, 2020, until July 25, 2020, for most states (July 26,
2020, for New York). The FPUC authority is now expired.
On August 8, 2020, President Donald Trump issued a presidential memorandum authorizing other needs
assistance (ONA) under Section 408 of the Robert T. Stafford Disaster Relief and Emergency Assistance
Act (Stafford Act; P.L. 93-288, as amended; 42 U.S.C. §5174(e)(2)) for lost wages. As described in
Federal Emergency Management Agency (FEMA) guidance, this Lost Wages Assistance (LWA) program
provides grants to states to supplement the weekly benefits of certain eligible UI claimants in
participating states, subject to a cost sharing requirement. LWA grants may be paid in the amount of $300
a week in entirely federal funds; or, if a state chooses to contribute an additional $100 a week in state
funds, the total is $400 a week. LWA grants are available for weeks of unemployment ending between
August 1, 2020, and December 27, 2020, but the program could terminate earlier if Congress enacts
supplemental COVD-19-related unemployment compensation (e.g., reestablishes the FPUC authority) or
certain conditions are met related to the balance of the Disaster Relief Fund (DRF).
This Insight discusses the now-expired FPUC benefit and currently authorized LWA grants to states,
including key differences in authorization and administration, benefit amount, eligibility, and funding. For
a preliminary legal analysis of LWA, see CRS Legal Sidebar LSB10532, President Trump’s Executive
Actions on Student Loans, Wage Assistance, Payroll Taxes, and Evictions: Initial Takeaways.
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Authorization and Administration: FPUC (now expired) vs. LWA
FPUC was created under Section 2104 of the CARES Act (P.L. 116-136). While authorized, FPUC was
an additional, federal y financed benefit that augmented al weekly UI benefits, including regular
Unemployment Compensation (UC), Pandemic Unemployment Assistance (PUA), Pandemic Emergency
Unemployment Compensation (PEUC), Extended Benefits (EB), Disaster Unemployment Assistance
(DUA), Short-Time Compensation (STC), Trade Readjustment Al owance (TRA), and Self Employment
Assistance (SEA). Al states administered weekly FPUC payments through agreements with the U.S.
Department of Labor (DOL). DOL provided guidance on FPUC to states. FPUC was structured as an
entitlement for UI claimants to be paid until the expiration of the program (July 25, 2020).
LWA is authorized under the August 8, 2020, presidential memorandum, which references the statutory
authority for ONA under the Stafford Act. LWA may augment the weekly benefits of certain eligible
claimants (see below) receiving UC, PUA, PEUC, EB, STC, TRA, and SEA; but not DUA. FEMA is
administering LWA; states may apply for LWA grants by September 10, 2020, and provide LWA in
conjunction with their UI systems. Additional y, DOL is providing technical assistance on LWA. LWA is
not an entitlement, but is subject to state application and availability of funds. There is a 25% cost sharing
requirement for LWA, as required by ONA in statute (42 U.S.C. §5174(g)(2)), which states can satisfy by
either paying $100 a week to eligible claimants or by demonstrating that the total UI benefits paid with
state unemployment funds in the aggregate meets the amount of the 25% match. FEMA maintains an
updated list of states that have approved LWA applications.
Benefit Amount: FPUC (now expired) vs. LWA
When it was authorized, FPUC provided an additional $600 a week to claimants in al UI programs. This
amount was 100% federal y financed. FPUC income must be disregarded for the purposes of Medicaid
and the Children’s Health Insurance Program (CHIP).
LWA may not exceed $400 a week, which includes up to $300 a week in federal funding plus an optional
$100 a week in non-UI state funds. (As of this date, two states—Kentucky and Montana—have
announced an intention to pay the additional $100 a week.) Under the Stafford Act, ONA is disregarded
“when determining eligibility for or benefit levels under federal y funded income assistance or resource-
tested benefit programs.”
Eligibility: FPUC (now expired) vs. LWA
When it was authorized, FPUC was payable to al UI claimants receiving at least $1 in underlying UI
benefits.
LWA is payable to UI claimants (in al programs except for DUA) who are receiving at least $100 a week
in underlying benefits (before offsets for any earnings during a period of partial unemployment or before
benefit reductions based upon participating in the STC program ) and self-certify that they are
unemployed or partial y unemployed due to COVID-19.
Funding: FPUC (now expired) vs. LWA
During its authorization period, FPUC payments, as wel as administrative costs related to FPUC, were
100% federal y funded. The FPUC authorizing language under Section 2104 provided for the
appropriation of “such sums as necessary” for benefit payments and costs incurred by states in
administering the payment, including implementation and staffing.

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LWA is funded through the Disaster Relief Fund (DRF), subject to funding limitations. After any of the
following conditions are met, LWA wil no longer be payable:
 FEMA has expended $44 bil ion on LWA.
 The DRF balance reaches $25 bil ion.
 Enactment of legislation providing supplemental federal unemployment compensation, or
similar compensation, for unemployed or partial y employed individuals due to COVID-
19.
 The program end date of no later than December 27, 2020, is reached.
FEMA is to initially provide three weeks of LWA grant funding to approved states—and then on
a weekly basis, thereafter—based on estimated payments. States may not use any UI funding
sources for LWA administrative costs. Instead, FEMA is to provide up to 5% of the total LWA
grant to states for administrative costs.

Author Information

Katelin P. Isaacs
Julie M. Whittaker
Specialist in Income Security
Specialist in Income Security

Disclaimer
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to congressional committees and Members of Congress. It operates solely at the behest of and under the direction of
Congress. Information in a CRS Report should not be relied upon for purposes other than public understanding of
information that has been provided by CRS to Members of Congress in connection with CRS’s institutional role.
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