Tennessee seeks federal supplement to more than double state jobless benefits

This story was updated at 5:11 p.m. on Wednesday, Aug. 19, 2020, with more information.

Jobless benefits may be going down this month, but Tennessee is seeking to maximize what it pays unemployed persons by tapping into a new federal relief fund to make up for half of the drop in federal supplemental benefits.

But it’s unclear when or how long those benefits could be coming for jobless Tennesseans.

The state Department of Labor and Workforce Development is applying to the Federal Emergency Management Agency (FEMA) to receive grant funding to pay up to $300 a week in additional federal supplemental weekly unemployment benefits on top of the state maximum benefit payment of $275 a week.

The new Lost Wages Assistance program (LWA) is only half of the previous $600 weekly supplement the federal government provided jobless claimants until the end of July and Tennessee is not providing the extra $100 state match that President Trump initially touted as a means to help substitute for much of the previous federal jobless benefit supplement that expired at the end of last month.

But the initiative, if approved by FEMA, will allow Tennesseans who qualify for jobless benefits to get up to $575 a week, including the state maximum of $275 per week plus the new $300 weekly federal supplement.

“The $300 option allows Tennessee to maintain its Coronavirus Relief Fund initiatives while still more than doubling the state’s maximum benefit amount,” said Chris Cannon, assistant administrator for the Tennessee Department of Labor and Workforce Development.

The LWA payments will be retroactive to August 1. Cannon said eligible claimants currently receiving benefits do not need to take any action because the state will automatically add LWA to their weekly benefit payment.

In anticipation of FEMA approval, Tennessee’s labor department has already begun working with its vendor to build a new program within the unemployment computer system to implement and pay LWA benefits.

“The state will work diligently to complete this process as quickly as possible,” Cannon said.

Congress continues to debate proposals for additional coronavirus relief, including a Democratic plan to maintain the $600 per week federal supplement. In the meantime, the Trump administration is trying to offer some relief for jobless persons beyond just the traditional state benefits.

“This program is another tangible example of this Administration’s commitment to helping Americans during these challenging times,” said John Pallasch, assistant secretary of labor for employment and training in the Trump administration. “The Department and our partners at FEMA will work tirelessly in the coming, days and weeks to ensure LWA’s vital and important benefits are made available to those most in need.”

LWA is funded by FEMA through a joint federal-state agreement and provides the states with two benefit options.

For the $400 per week benefit, states must contribute 25 percent ($100) and the federal government will cover 75 percent of the cost ($300).

Tennessee is opting for the smaller $300 per week supplemental benefit, which will be entirely funded by FEMA provided that the state gives at least $100 of benefits.

Tennessee’s average state jobless benefit is $225 a week. The state’s maximum unemployment benefit in Tennessee is $275. Only three states — Arizona, Louisiana and Mississippi — have lower state jobless rates.

The federal grant funds will be capped at $44 billion and are issued from FEMA’s Disaster Relief Fund, which typically funds emergency responses to natural disasters. The program is slated to run through Dec. 26 but could end earlier, depending upon how many individuals in each state qualify to receive the weekly federal grant. Tennessee Labor Commissioner Jeff McCord said the program could run in Tennessee for five to six weeks.

Rebecca Dixon, executive director for the National Employment Law Project, said states are limited in how they can spend unemployment insurance funds without congressional authorization.

“The language in the memorandum says that these benefits must be paid “in conjunction with the State’s unemployment insurance system” which means that states will have to set up a new way to add these payments to existing benefits,” she said. “Setting up a new system entirely will be difficult, if not impossible.”

Tennessee has been using federal aid given to the states for coronavirus relief to pay for state jobless benefits for the past couple of months to help preserve the state’s unemployment insurance fund above the $1 billion level to avoid having to raise premiums on employers during the current economic slowdown.

“The state will continue to evaluate the use of both the unemployment trust fund and Coronavirus Relief Funds to pay benefits on a month-to-month basis,” Cannon said.

Contact Dave Flessner at [email protected] or at 423-757-6340.

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