Unemployment insurance more than regular salary due to COVID?

[Leo]

Hypothetically, let say a person earns about $15/hr full time ($1,200 per 2 weeks, about $978 after taxes).

Due to coronavirus, his hours got reduced from 40 hours to 20 hours per week. So his income reduced from $978 to $518 per 2 weeks.

But that means he is eligible for EDD Unemployment Insurance for about $349 per week, but because of stimulus package, instead of $349 per week, he is getting $949 per week (additional $600 than regular unemployment)

Now, he is earning $2416 for 20 hours of work after taxes every 2 weeks (up to 6 months) and higher than his 40 hour work normal salary of $978 per 2 weeks.

That's really strange lol

[disneysteve]

Do you get the full $600 extra money if you're only collecting half-time unemployment or is it pro-rated?

[ua_guy]

There's a point where it is possible to make more on unemployment than in regular wages. The break-even point varies by state because of variation in state benefits and at what percentage they cover regular wages.

What isn't calculated beyond regular wages is the potential loss of health benefits, retirement contributions, incentive pay. Not having a job means more than just the loss of an hourly wage. But what if it is generous compared to normal times.

This is targeted at the bottom of the wage distribution for good reason. These are people who spend everything they make and are a pillar of the economy and will be key players in reopening.

[Petunia 100]

Do you get the full $600 extra money if you're only collecting half-time unemployment or is it pro-rated?

It isn't pro-rated. See this from the Dept of Labor: https://wdr.doleta.gov/directives/at...UIPL_15-20.pdf

At the bottom of page I-5:

If the individual is eligible to receive at least one dollar ($1) of underlying benefits for the claimed week, the claimant will receive the full $600 FPUC.

[Petunia 100]

Hypothetically, let say a person earns about $15/hr full time ($1,200 per 2 weeks, about $978 after taxes).

Due to coronavirus, his hours got reduced from 40 hours to 20 hours per week. So his income reduced from $978 to $518 per 2 weeks.

But that means he is eligible for EDD Unemployment Insurance for about $349 per week, but because of stimulus package, instead of $349 per week, he is getting $949 per week (additional $600 than regular unemployment)

Now, he is earning $2416 for 20 hours of work after taxes every 2 weeks (up to 6 months) and higher than his 40 hour work normal salary of $978 per 2 weeks.

That's really strange lol

Yes, but its also very temporary. (Unless some future stimulus package extends it).

[LivingAlmostLarge]

It's really only people at the bottom of the payscale. I think the max where I live is $700/week. That is 50% of $1400 max income. So you make $72k/year to get the maximum benefit. How many people are at that level? Those who earn more trust me would rather be working and earning their $10k/month salary than $700/week and $600/week extra Unemployment because it's still not quite what they were making.

I don't think it's a bad thing for people earning less to be getting the extra. Plus where I live like I've pointed out it's 50% of your income. So if you were making $800/week and getting $400/week, then yes the extra $600 is more than you were making but for how long?

[bjl584]

The extra "kicker" money is for 4 months, then it's back to normal unemployment rates.
It all varies by state, income, and employment status.
Some people will end up with more than they would have by working an honest 40.
But, it's a temporary situation.
I'm sure most of them would rather have a secure long term job than a 4 month shot in the arm.

[MonkeyMama]

& some states pay employment to part-timers. My part-time employed spouse was laid off, so unemployment will be significantly more than his regular pay. Because he is only a seasonal employee also, his unemployment pay is silly, something like $130 per week. Maybe 1/3 of his usual pay. But then add $600 per week and suddenly he is getting paid twice as much as usual.

He's been called back to work in May, full-time, unfortunately. Even if it was just a few hours a week, as soon as he made $130 per week he would probably get -$0- unemployment benefit. If the pay received offsets unemployment benefits. So now he will be making less full-time than he was on unemployment.

{Oh yeah, even better he has summers off from his job so will be getting $3k per month (that's $3k more than $0) in June & July}.

But it's a good job and he wants to keep it. As my co-worker said, "My parents rather stay on unemployment because they make terrible decisions and are terrible with money". If all you care about is the next 4 months, then sure, take the unemployment. (My state is not requiring anyone to look for work. My husband's employer is great and told him they understand if he rather stay on unemployment. I expect most their employees will, which may be some of why they want my hubby back full-time). We care more about the long-term and keeping a good job.

[~bs]

Well known and written about already. Even in the other older unemployment article. If you qualify for $1 of state unemployment, you get $600. That's just the way it is, pros and cons to it.

[riverwed070707]

I've seen a lot of grumping about this on social media from people who are still working. The rationale behind the $600 was very logical, and as others already noted, its a small percentage of the lowest earners who are making more than they before unemployment. The average unemployment benefit is 36% of a workers full time pay. Knowing this was going to be a lengthy event and that workers don't have the option to go out and find other jobs, they needed to get the benefit closer to 100% income replacement. Based on average historical data, $600 was the number they came up with the get most people at or close to 100% pre-unemployment income without having to calculate each individuals need which would have slowed down getting money out to the unemployed. Yes that means some people are getting more, but it isn't a lot more and is certainly better than having millions of Americans unable to buy food or pay for rent. The effects would have been so much more devastating than they already are.

[~bs]

I've seen a lot of grumping about this on social media from people who are still working. The rationale behind the $600 was very logical, and as others already noted, its a small percentage of the lowest earners who are making more than they before unemployment. The average unemployment benefit is 36% of a workers full time pay. Knowing this was going to be a lengthy event and that workers don't have the option to go out and find other jobs, they needed to get the benefit closer to 100% income replacement. Based on average historical data, $600 was the number they came up with the get most people at or close to 100% pre-unemployment income without having to calculate each individuals need which would have slowed down getting money out to the unemployed. Yes that means some people are getting more, but it isn't a lot more and is certainly better than having millions of Americans unable to buy food or pay for rent. The effects would have been so much more devastating than they already are.

Part of the rationale for the $600 across the board is that the state unemployment systems are generally archaic, with some systems 40-50 years ago. A flat dollar amount simplifies the calculation to "if state amount>=$1, then federal amount = $600". Plus I dont think they want hoardes of people looking for jobs during the pandemic or becoming homeless or turning to crime. Plus many of the ones out on unemployment need to cover their own medical costs. Keep the masses sedated with helicopter money.

[disneysteve]

I really don't see why this is even an issue. If it benefits you, great. Enjoy the little bump in pay for a few weeks. You deserve it. If it doesn't impact you because either you earn too much for it to affect you or, even better, you're still employed, be grateful for that. It's totally a non-issue in my mind.

[Leo]

Part of the rationale for the $600 across the board is that the state unemployment systems are generally archaic, with some systems 40-50 years ago. A flat dollar amount simplifies the calculation to "if state amount>=$1, then federal amount = $600". Plus I dont think they want hoardes of people looking for jobs during the pandemic or becoming homeless or turning to crime. Plus many of the ones out on unemployment need to cover their own medical costs. Keep the masses sedated with helicopter money.

Ah now this makes sense, I was gonna ask why not cap it to the original salary instead of adding a static $600 for all accounts.

Btw, I didn't create the thread to point out it is an issue, I was just really curious why the system is like that and I think explanation of ~bs makes sense

[disneysteve]

Ah now this makes sense, I was gonna ask why not cap it to the original salary instead of adding a static $600 for all accounts.

Btw, I didn't create the thread to point out it is an issue, I was just really curious why the system is like that and I think explanation of ~bs makes sense

Understood. It's really no different than asking why everyone got the same $1,200 stimulus check. Obviously, to some recipients, $1,200 was a huge windfall while for others it was just a nice little gift depending on if you earn 30K or 95K. It was just way simpler to pick a number and give it to everyone.

[LivingAlmostLarge]

Yeah but there are large contingents of people who did not get the stimulus checks. People who are now unemployed but weren't in 2019 so they didn't qualify but their income will be much different in 2020. So nothing can be entirely fair.