What Is Federal Pandemic Unemployment Compensation?

The Federal Pandemic Unemployment Compensation (FPUC) program, authorized by the CARES Act and renewed by subsequent legislation and a presidential order, initially provided $600 per week in extra unemployment benefits to unemployed workers in states that opted into the program.

In August 2020, the additional payment was lowered to $300, the amount authorized by the American Rescue Plan Act (ARPA) of 2021 through Sept. 6, 2021.

How Federal Pandemic Unemployment Compensation Works

To receive the FPUC extra $300 per week benefit, you had to file a claim for unemployment benefits, but you didn’t need to sign up expressly. The payments were automatic if you qualified for regular unemployment insurance (UI) payments. When FPUC payments ended on Sept. 6, 2021, those eligible for regular unemployment compensation from their state continued to receive it.

At least 25 states stopped making FPUC payments before the September deadline. One of the reasons governors cited was that the unemployment rate was low. For example, on Aug. 20, 2021, the national unemployment rate was 5.4%, down 0.5% over the month and 4.8 points lower than in July 2020.

History of FPUC Authorization and Funding

As noted, additional unemployment benefits of $600 per week were originally authorized by the CARES Act through July 31, 2021. This was followed by the Lost Wages Assistance (LWA) program, authorized by an Aug. 8 presidential memo and subsequent Department of Labor (DOL) guidance.

LWA funds, which were expected to last from Aug. 1, 2020, to Dec. 27, 2020, were depleted by Sept. 5, 2020. The signing of the Consolidated Appropriations Act of 2021 into law on Dec. 27, 2020, restarted the FPUC program and authorized $300 FPUC payments beginning after Dec. 26, 2020, and ending on or before March 14, 2021.

The American Rescue Plan Act (ARPA) of 2021, which became law March 11, 2021, extended FPUC payments through Sept. 6, 2021. ARPA also provided a waiver of federal income taxes on the first $10, 200 in unemployment benefits received in 2020.

History of FPUC

In states where FPUC funds were available, payment was generally automatic and did not require a special application. In most states, to get the now defunct-extra $300 weekly bonus: You had to be eligible for—and receiving—unemployment benefits, including unemployment compensation (UC, pandemic emergency unemployment compensation PEUC, extended benefits EB, or pandemic unemployment assistance PUA).

You had to be able and willing to return to work. You had to have become unemployed or had hours reduced due to the COVID-19 pandemic. Beyond stated eligibility standards, it was up to the state or territory to decide what, if anything, you needed to do to receive the money.

In states where FPUC funds were available, payment was generally automatic and did not require a special application. In most states, to get the now defunct-extra $300 weekly bonus:

• You had to be eligible for—and receiving—unemployment benefits, including unemployment compensation (UC, pandemic emergency unemployment compensation PEUC, extended benefits EB, or pandemic unemployment assistance PUA).
• You had to be able and willing to return to work.
• You had to have become unemployed or had hours reduced due to the COVID-19 pandemic.

Beyond stated eligibility standards, it was up to the state or territory to decide what, if anything, you needed to do to receive the money.

Special Considerations

For you to receive FPUC funds, your state or territory (also includes Washington D.C.) had to sign up. According to the DOL, as of April 29, 2020, all 50 states and the District of Columbia were signed up and paying FPUC benefits.

As of July 10, 2021, according to the Congressional Research Service, 25 states stopped providing temporary federal unemployment benefits, including FPUC program funds. These state officials stated that extra and extended unemployment benefits discouraged unemployed workers from returning to the workforce.

As of Sept. 24, 2021, some states are reinstating requirements that out-of-work benefits recipients prove they are looking for work, a stipulation most states dropped after the pandemic hit in 2020. Some states and businesses are now offering sign-up bonuses to encourage workers to apply for available jobs.

Interestingly, a working research paper by Professor Arindrajit Dube of the University of Massachusetts at Amherst, suggests that low unemployment insurance benefits do not increase employment levels more than happens in states with high levels of unemployment insurance benefits.

Special Considerations

In states where FPUC funds were available, payment was generally automatic and did not require a special application. In most states, to get the now defunct-extra $300 weekly bonus:

• You had to be eligible for—and receiving—unemployment benefits, including unemployment compensation (UC, pandemic emergency unemployment compensation PEUC, extended benefits EB, or pandemic unemployment assistance PUA).
• You had to be able and willing to return to work.
• You had to have become unemployed or had hours reduced due to the COVID-19 pandemic.

Beyond stated eligibility standards, it was up to the state or territory to decide what, if anything, you needed to do to receive the money.