Skip to main content

As the $600 unemployment program ends, this is how it could impact you

As the $600 unemployment program ends, this is how it could impact you
(Image credit: Future)

Out-of-work Americans who have been relying on the unemployment stimulus to make ends meet are set to face increasingly difficult financial decisions after the program drew to a close with no replacement agreed. More than 25 million unemployed workers have now lost the $600-a-week unemployment insurance benefit (opens in new tab) that had been supplementing the standard level of benefit available to them since the end of March. 

With decision makers in Congress continuing to mull over a new stimulus package, those without a job can now only collect the benefit allowed by their home state. However, with typical payouts varying widely between states, some will be hurt by the loss of the additional payout much more than others. Indeed, according to analysis (opens in new tab) by Zippia, the weekly extra $600 is more than double the standard benefits allowed by some states - across the US, maximum unemployment benefits range from $823 in Massachusetts to just $235 in Mississippi. 

Given the worryingly high rates of unemployment and the ongoing spread of COVID-19 in many states, finding a new job seems likely to remain a significant challenge for some time to come. In the meantime, many out-of-work Americans will be contemplating how to make ends meet, whether it be via a personal loan (opens in new tab), credit card or a payday loan.  

As the $600 unemployment program ends, this is how it could impact you

(Image credit: Getty)

The states that will suffer the most

Having evaluated the unemployment numbers and benefits available in each state, Zippia has identified the workers that will be hardest hit by the loss of the extra $600 benefit. As well as being entitled to the lowest weekly state benefits, these workers also live in states where unemployment is high, meaning greater competition in landing a new job. 

According to the analysis, those who will be hurt the most by the loss of the supplementary unemployment benefit live in Michigan. Not only does the state have the 6th worst unemployment in the nation, with some 15% currently out of work, the weekly maximum benefit in the state is just $362, payable for a maximum of 33 weeks. With the loss of the extra $600, Michigan workers are therefore facing a 62% reduction in the benefit they have recently been receiving. 

Expected to be next hardest hit are the unemployed of Arizona, where one of the least supportive unemployment programs pays at most just $240 a week, meaning an overnight reduction in benefits of 71.4%. The one small saving grace for the 10% who are unemployed is a slightly longer benefit period of 39 weeks.

Ranked alongside Arizona, Florida has one in ten workers who are jobless and a standard benefit of $275 or less, equating to a 68.5% cut in benefits overnight. Compounding this, those who are out of work can expect to receive payments for a maximum of just 25 weeks - one of the shortest benefit periods of any state.

The states facing the greatest hardship as the $600 benefit ends. Source: Zippia
RankState Maximum weekly benefitsJune unemployment rate

What can those most vulnerable do?

While unemployed workers are facing heightened jeopardy across the US, the challenges facing workers in these particular states run deeper than most. So what should those facing up to a future on a greatly reduced income do?

Budget and claim

Cutting back on your spending where you can is probably the first thing most people would do, as is claiming for everything that you can in respect of benefits. Make sure you have claimed any outstanding tax refund (opens in new tab), received your coronavirus stimulus payment, and keep an eye out for news of a second check (opens in new tab)

Similarly, another version of the unemployment program that has just ended is on the way. The latest soundbites (opens in new tab) suggest any new scheme will be watered down compared with what was on offer before, so as to encourage Americans back to work where jobs exist, but should be welcomed nonetheless. 

CalculatorAs the $600 unemployment program ends, this is how it could impact you

(Image credit: Pixabay)

Talk about your mortgage

If you’re a homeowner and concerned about your mortgage payments, speak to your lender straight away. Take advantage of the extra leeway (opens in new tab) the best mortgage lenders (opens in new tab) are affording and remember that many lenders are prohibited from foreclosing and evicting those who are struggling to pay. 

With mortgage rates at all-time lows, it is also worth checking out the best refinance mortgage companies (opens in new tab) to see if a new mortgage deal might lower your monthly payments. 

Take control of your debt

Debt can be an all-consuming worry at the best of times. Now, if you’re out of work and just seen your benefits take a significant cut, you might be considering borrowing to see you through until things have a chance to improve. For some, thoughts may turn to a payday loan (opens in new tab), but these should be approached with utmost caution - always make use of the alternatives first, such as the personal loans and credit cards (opens in new tab)

If you hold a credit card or loan, but are struggling to repay these, contact your lender to see whether they can be more accommodating (opens in new tab) until your situation improves. Importantly, try not to let your debt get out of control - talk to family and friends to see if they can help, speak to the companies you money to, and then consider the best debt consolidation companies (opens in new tab) to see if they could help.

With over 20 years’ experience in the financial services industry, Tim has spent most of his career working for a financial data firm, where he was Online Editor of the consumer-facing Moneyfacts site, and regularly penned articles for the financial advice publication Investment Life and Pensions Moneyfacts. As a result, he has an excellent knowledge of almost areas of personal finance and, in particular, the retirement, investment, protection, mortgage and savings sectors.