Unemployment benefits for workers to be reduced to 40 % of income in July

As June approaches, almost 18 million Americans are receiving unemployment benefits at an enhanced rate due to COVID-19. The $2.2 trillion in relief from the CARES Act has been helping individuals survive the loss of income at an extra $600 a week, but UI benefits state-by-state differ in total amounts paid. 

Gary Burtless, an economist and senior fellow at the Brookings Institution shines light on the situation by showing these payouts have been the highest since the development of America’s unemployment insurance program in the 1930s. By the time the CARES Act funding is depleted, unemployment payouts will return to the original rate of 40 percent of workers regular wages. Laid-off workers will feel discouraged by the decrease in weekly benefits towards the summer months. 

“Then, they’ll have to make do with whatever the regular unemployment-insurance benefit is in their state,” says Burtless. 

The financial security and safety of employees and small businesses is the utmost concern of Capsule, and we are ready to help you with your financial planning. 

Sources for this article are from CNBC.

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