What COVID relief deals in Lansing, Washington mean for Michigan families

With only days remaining until unemployment benefits would end for hundreds of thousands of Michigan residents, new state and federal legislation just needs to be finalized to send more money to jobless workers.

Michigan’s Legislature on Monday approved a $465 million spending bill for coronavirus relief; it now moves to Gov. Gretchen Whitmer for her signature. 

Also on Monday, Congress approved a $900 billion pandemic relief package. That now moves to President Donald Trump for his signature. 

Under the plans, a couple that lost jobs with a combined income of $140,000 and two children could each receive up to $362 a week in state unemployment; $2,400 through a one-time federal payout ($600 per family member) and another $300 federal weekly payout for each unemployed adult for 10 weeks. 

If they lost work in, say, a restaurant dining room or other setting closed by the state under COVID restrictions, they could get one-time state grants of $1,650.

Other provisions in the federal plan call for a moratorium to evictions through Jan. 31, and funding for rental assistance and child care.  

About 581,000 people in Michigan collected unemployment benefits as of last week. Michigan’s unemployment rate jumped to 6.9 percent in November, according to federal data released this month. That was up from 6.1 percent in October, when many hoped job losses would continue to fall.

However, the increase in coronavirus cases that struck the state and the nation this fall raises more challenges for workers and the unemployment system. 

Michigan initiated a new round of COVID restrictions in November that affected businesses, closing movie theaters, non-tribal casinos and indoor dining at restaurants. While Whitmer initiated some reopening last week, the economic effects appear to include more job losses on top of seasonal expectations for lower employment.

“We expected the second wave of the pandemic to inhibit Michigan’s economic recovery this winter,” according to the economic forecast report released Nov. 19 by the University of Michigan, one day after Michigan’s newest round of restrictions took effect.

Related stories:

• Michigan lawmakers head home. Stimulus passes. Transparency reform still dead.
• Long-term changes proposed for Michigan’s unemployment system
• Whitmer extends Michigan indoor dining ban, allows other businesses to reopen

Under the forecast, Michigan could reach a 6.6 percent unemployment rate by the end of 2021, falling to 5.6 percent by the end of the following year.

Here’s what to expect from the state and federal aid packages: 

Michigan will extend unemployment benefits 

The Michigan Legislature voted to extend through March a temporary relief provision allowing unemployed residents to qualify for up to 26 weeks of benefits rather than the standard 20 weeks. 

Whitmer had asked for that extension and is expected to sign the measure. She’s approved previous extension periods. 

“Extensions for collecting (unemployment) payments are in effect only during periods of high unemployment and only if the state or federal government take specific action to provide extended benefits,” the state’s Unemployment Insurance Agency (UIA) said on its website.

Michigan had reduced its maximum benefits period to 20 weeks in 2011 under then-Gov. Rick Snyder. 

U.S. to extend unemployment benefits, too 

The federal government will pay regular unemployment benefits, not the state, through mid-March, according to the plan passed by Congress. It also will add 13 weeks of benefits eligibility to jobless workers who’ve exhausted the state’s plan.

As of Dec. 12, about 170,000 residents were on “regular” unemployment, with another 17,000 seeking benefits. Another 411,000 “gig,” part-time and self-employed workers were getting benefits under the federal Pandemic Unemployment Assistance.

The Bureau of Labor Statistics showed 50,215 state residents requesting extended unemployment benefits at the end of November, a sign of the duration of some layoffs. Only three states had more workers requesting extended benefits than Michigan: California, New York and Texas. 

Some workers will see delays as extensions take effect 

People in the federal unemployment programs – either PUA or the extended benefit program – will experience a delay in payments in early January, said Jason Moon, spokesperson for the state UIA. It is unclear how long the delay will last.

He said it’s due to the time UIA needs to set up the program extensions after the federal legislation has been signed. 

“This will only be a disruption and claimants will be made whole once the extensions are fully implemented,” Moon said.

Unemployed workers should see an extra $300 per payment

The federal plan calls for $300 in weekly payments in addition to regular payments for unemployed workers with active claims. The extra payment will run for 10 weeks, expiring in mid-March. The plan is similar to the $600 weekly supplemental payment distributed through July, an amount credited with allowing jobless workers to continue to make housing and other essential payments. 

Michigan’s maximum unemployment payment is $362 per week.

Michigan’s Unemployment Trust Fund may get a state cash infusion.

As part of the state’s pandemic relief legislation, Michigan also will deposit $220 million into the Unemployment Compensation Fund to pay for the  continued extension of jobless benefits from the standard 20 weeks to 26 weeks, if Whitmer supports the provision.

Businesses typically fund the unemployment system, and have worried about having to contribute higher payments into it in 2021 if the unemployment extension took place. The trust fund balance fell to $900 million in early December, after starting the year at $4.6 billion. 

Under the plan approved by the Michigan Legislature, companies would not bear the costs of the extended benefits. The state isn’t going to have to borrow from the federal government to cover a dwindling fund balance. 

“Many employers are not in a position to absorb the tax increase,” Wendy Block, vice president of government affairs for the Michigan Chamber of Commerce, told Bridge Michigan earlier this month. “I think the Legislature found a good balance.”

So far, the state has paid out $4.8 billion from the trust fund during the pandemic, while federal funds have covered $15.2 billion in payments to Michigan residents, according to the UIA dashboard.

Some laid-off Michigan workers could get grants of up to $1,650 

Michigan workers who were furloughed, laid off or had their hours cut because of public safety gathering restrictions – such as restaurant workers or indoor fitness instructors – will be able to qualify for individual grants of up to $1,650 under a new “employee assistance” state program. 

It’s not clear how long it will take to get the program up and running. The state stimulus legislation tasks the Michigan Restaurant and Lodging Association with developing the application review and determination processes for the grants, which will be awarded by the Michigan Department of Treasury.

Applicants will be required to indicate the percentage of income they lost because of full or partial business shutdowns. The restaurant  association will be required to work with other business groups to ensure “equitably distributed grants across individual business sectors of affected employees.”

More federal stimulus, too 

The federal bill provides $600 in one-time payments directly to individuals, plus $600 per child. The full amounts will go to individuals making less than $75,000 or couples making less than $150,000, with gradually reduced amounts for people at higher income levels. 

The Internal Revenue Service could start processing payments before year-end, according to Treasury Secretary Steven Mnuchin. Accounts set up with the IRS for direct deposit should see the payments first.