Michigan seeks $300 per week in extra benefits for unemployed

August 21, 2020: Feds OK extra $300 a week for Michigan jobless – but it may not last long

LANSING — Michigan is asking the federal government to provide jobless residents with $300 a week in extra unemployment benefits to replace the $600 per week pandemic bonus that expired in late July. 

The state's Unemployment Insurance Agency applied for program funding through the Federal Emergency Management Administration, Democratic Gov. Gretchen Whitmer announced Tuesday. 

Unable to reach an agreement with Congress on another federal relief package, Republican President Donald Trump last week signed an executive order to make extra unemployment funding available through the federal Disaster Relief Fund.

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​​Whitmer blasted the president at the time because his order fell short of the $600 residents had qualified for and appeared to require cash-strapped states like Michigan to cover $100 of what could be a $400 weekly benefit. 

But additional guidance since provided by FEMA makes clear that states can qualify for $300 a week in extra payments for their jobless residents without shouldering any additional costs.

"This program will provide some much needed support for families that are struggling to put food on the table or pay their bills, but it’s a short term Band Aid that falls short of what’s needed,” Whitmer said in a statement announcing the state's application. 

“A robust congressional recovery package that meets the scale of this crisis is what’s needed to help individuals who have lost work as a result of the pandemic get through this unprecedented time.”

If approved by FEMA, it's not clear how long it would take the Michigan Unemployment Agency to make the benefit available to residents. The agency has struggled to keep up with a record surge in jobless claims. 

The UIA is still "evaluating" federal guidelines to determine an "implementation timeline," spokesperson Jason Moon told Bridge.

The agency declined to provide a copy of its FEMA application, but Whitmer's office said the state will use existing Unemployment Trust Fund payments as the 25 percent match required to qualify for the extra federal benefit. That’s allowed under new federal rules. 

Jobless Michiganders can currently earn up to $362 a week in traditional benefits and could qualify for another $300 if the federal government approves Michigan's application.

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Trump's order, which could still be challenged in court, seeks to provide up to $400 a week in extra pandemic benefits, but qualifying for the maximum benefit would require states to chip in $100 per claimant.

Pursuing that option would have cost Michigan $90 million to $100 million a week, according to Whitmer spokeswoman Tiffany Brown.  And with tax revenue down amid the pandemic, the state is already essentially broke. 

Whitmer and the Republican-led Legislature used most of Michigan's federal pandemic funding to plug a $2.2 billion budget hole for the current fiscal year, and the state is still facing a projected $3 billion budget deficit for next fiscal year, which begins in October. 

Trump's order forbids states from using unemployment trust funds to qualify for the $400 weekly benefit, "which means that the state would have to find hundreds of millions of dollars and exacerbate a large budget shortfall," Brown said. 

Resolving the unemployment benefits question is important for Michigan as the pandemic continues, said Gabe Erlich, economist at the University of Michigan.

The lack of clarity of how much would be paid in jobless benefits after the $600 per week additional benefit  expired at the end of July raised economic uncertainty for laid off workers across the United States.

“It remains urgent … to give people the ability to plan for their future, going forward,” Erlich said, “and to know what economic policy is going to look like.”

The CARES Act, a $2.2 trillion federal spending plan that had included unemployment benefits that lapsed, “protected a lot of people from serious financial hardship," Ehrlich said. 

At least 2.4 million Michigan residents have filed for jobless benefits since the coronavirus prompted business shutdowns and a statewide stay-at-home order in March. At least 500,000 Michigan claimants were receiving ongoing payments at the start of August.