Minnesota officials to decide next week on program for extra $300 in unemployment benefits

Minnesota state officials are still evaluating a new federal program that would give out-of-work Minnesotans an extra $300 in weekly unemployment benefits, but they have indicated they plan to apply to be part of it.

Several states including Iowa, New Mexico and Missouri have already received approval from the Federal Emergency Management Agency (FEMA) to disburse the additional payments -- and at least one state, Arizona, already began distributing the funds to its residents this week.

But it may take a few more weeks for some states to get the program up and running as they adjust their systems and technology to meet the requirements.

Rita Beatty, a spokeswoman for the Minnesota Department of Employment and Economic Development (DEED), said the agency is reviewing the Lost Wages Assistance program and considering steps for program implementation.

“We expect to have a decision next week,” she said in an e-mail.

States have until Sept. 10 to apply for the program.

President Donald Trump signed an executive order on Aug. 8 authorizing the enhanced payments as a partial replacement for the $600-a-week that unemployed workers received through July under the CARES Act. Those additional funds had been helping to boost consumer spending and kept many workers above water as rent and other bills have come due.

Democrats and Republicans have been unable to agree on a new coronavirus aid package to extend the additional benefits.

About 350,000 Minnesotans continue to make unemployment claims every week. The state’s unemployment rate fell to 7.7% last month, but job growth has slowed with the state having recovered only about a third of the jobs its lost since the start of the pandemic.

Last week, DEED Commissioner Steve Grove sent a letter to U.S. Secretary of Labor Eugene Scalia and FEMA Administrator Peter Gaynor saying the state intended to apply, but wanted to ask a few questions before signing up.

Specifically, he asked if the state can be certain the payments will be reimbursed once a request is made and if FEMA will be setting aside a share of the disaster relief funds for Minnesota. He also asked if the funds will be released on a first-come, first-serve basis and how long it will take from when funds are requested to when they are made available.

“Upon clarifying and favorable receipt of responses to our inquiries, you can expect Minnesota’s submission for the Lost Wage Assistance program,” he wrote.

The questions from Minnesota officials highlight the fact that it’s unclear how long the funds will last. States that apply and are accepted are initially guaranteed to get three weeks of payments. But after that, disbursements will be made on a weekly basis until the $44 billion fund runs out or until the program is slated to end December 27. But according to some estimates it could run out within six weeks.

States can select a $300 or $400 a week payment option. Most states are expected to choose the $300 option since they would have to pay the additional $100 at a time when many states are already facing shrinking budgets due to the pandemic.

In his letter, Grove noted that more than 900,000 Minnesotans, a record number, applied for unemployment benefits since mid-March.

“As you are aware, when the federal $600 ‘top up’ benefit ran out in late July, that loss of income hurt the hundreds of thousands of Minnesotans who remained out of work,” he wrote. “Without those additional federal benefits, families are struggling to pay for basic necessities and our food banks are challenged to meet the demand. That is why we are taking the new federal Lost Wages Assistance program very seriously.”

While some other states are also still trying to better understand the guidelines in how to administer the new program before applying, South Dakota is among the handful of states that are sitting it out entirely. Gov. Kristi Noem said the state doesn’t need it because its recovery is going well.

Under the lost wages program, workers have to be receiving at least $100 in state unemployment benefits a week in order to qualify for the additional payments and have to have lost work because of the COVID-19 pandemic.

Kavita Kumar • 612-673-4113

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