Here’s what to do if you’re still jobless by the time your coronavirus unemployment benefits run out

Brian van der Brug / Contributor / Getty Images

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For the tens of millions who’ve lost their job during the coronavirus pandemic, one fear likely looms above the rest: remaining out of work after their unemployment benefits expire.

Congress’ third fiscal care package, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, made the unemployment insurance (UI) program more generous by providing an additional $600 in weekly payouts and extending benefits for an extra 13 weeks, a much-needed financial cushion during the worst economic crisis since the Great Depression. Still, how much you’re paid and for how long differs from state to state.

But even as areas of the country tiptoe toward reopening by walking back some of their stay-at-home restrictions — a policy choice that’s resulted in almost 1 in 4 U.S. workers losing their jobs in a matter of weeks — economists say unemployment likely won’t return to its previous half-century low anytime soon. Meanwhile, talks among lawmakers on Capitol Hill appear to be in limbo when it comes to enacting a fourth relief bill, though a chorus of voices in Washington are pushing for more aid.

It means that fears over benefits not lasting long enough are a valid concern. Here’s 10 steps you can take to help prepare your finances.

1. Know what’s out there for you through the extended unemployment insurance (UI) system

There’s no one-size-fits-all policy to the extended UI program, with each individual state determining how much and for how long they make a weekly payout. It’s important to have awareness of what’s out there for you — which, all in all, should last about 39 weeks, if you’ve lost your job on or before Dec. 31, 2020, according to the Department of Labor.

But there is one date to keep in mind: July 31. It’s the cutoff for when the CARES Act-backed extra $600 check expires. Some states, however, have carved out their own deadlines. In Illinois, for example, individuals who started claiming their additional $600 benefits beginning the week of March 29 will receive that boosted check until July 25. It’s worth checking into your state’s individual policy, given that the program is left up to states’ discretion.

After the calendar turns from July to August, your weekly payout should return to what your state was providing before the CARES Act. At the end of 2019, weekly payouts averaged out to about $371 nationwide, according to Labor Department data.

About 41 million Americans have filed for unemployment benefits over the past 11 weeks.


The CARES Act-backed 13-week extension also differs, largely depending on how much your state paid out before the pandemic. Montana offered 28 weeks of payouts, meaning individuals could receive 41 weeks of unemployment benefits once it’s all said and done. Other states, such as North Carolina and Florida, offered 12 weeks of payments, rounding out the total to 25 weeks.

But it’s not as if you’ll be financially cut off immediately. Also introduced through the CARES Act is the Pandemic Unemployment Assistance (PUA) program, which supplies 39 weeks of benefits in total. Normally disbursed to those ineligible for UI, such as gig workers and contractors, the program can be used as a supplement for individuals who’ve run out of normal state and expanded CARES-Act aid.

All of this might seem up in the air, though, if you’re one of thousands of people who still hasn’t been able to get through to file a claim. States have been overwhelmed by applications, many of which have resulted in website crashes and hours-long waits. Even worse, some individuals still haven’t received a payment. That extra $600 should be back-dated, says Michele Evermore, senior policy analyst at the National Employment Law Project, who specializes in unemployment insurance. This means you could still collect that extra cash beyond the July 31 cut-off date.

“The $600 will go backwards, but not forwards,” Evermore says. “If a person became unemployed in the middle of April, and they applied and got approved in the middle of May, they’ll get the $600 back to the middle of April, but not before the CARES Act implementation.”

2. Budget wisely, and trim your discretionary purchases

After you’re aware of how long your benefits will last and how much you’re going to get, it’s wise to turn to your household balance sheet. Make a list of all of your monthly expenses, including those that are discretionary and nondiscretionary.

Try to find ways where you can cut back for the time being, which could include anything such as dining out, shopping, subscription services — you name it, says Eric Simonson, CFP, owner of Minneapolis-based Abundo Wealth. You’ll likely need to craft a spending plan before the $600 weekly payout ends, he says.

“Some people who are receiving unemployment benefits haven’t had to feel the full economic pain yet, just because unemployment benefits have more or less been their whole income,” Simonson says. “Especially considering the extra $600 dollars a week many are getting.”

3. Reduce credit card bills with a balance transfer

Lowering your debt payments is another way you can reduce your overhead.

One of these ways is utilizing a balance-transfer card. If you’ve been saddled with credit card debt during your spell of unemployment, this option can provide you with some relief. Balance-transfer cards help you consolidate your credit card debt into one monthly payment, many of which offer a low introductory Annual Purchase Rate (APR).

Even then, there’s some fine print to be aware of. Many credit card issuers have started to pull back on more generous benefits in the face of economic distress, and if your credit score is low, you might not always qualify for these offers. Transferring your balance typically also comes with a fee, sometimes anywhere between 3-5 percent. Compare how much you’d save in interest with those upfront costs to determine whether it’s the right situation for you.

4. Try to sock away as much money as you can

When you trim those expenses, put those extra funds in a savings account with easy-to-access provisions. Shop around for the best accounts on the market for your financial situation. Even though the Federal Reserve has slashed rates to zero, many non-traditional, online savings accounts offer rates higher than brick-and-mortar banks.

If you’re keeping this money separate from where you normally transact, it will be less tempting to spend. Meanwhile, with a savings account, your money will keep growing.

“If we’re in that situation where, three months down the line, we’re going to lose our benefits, and we don’t think we’re going to be employed at that point, it pays to not wait,” Simonson says. “Now is the time to figure out — $50 a month, $200 — that you could cut out of your budget to help pad your cash reserves.”

5. Call lenders, servicers where you regularly have a bill

But discretionary items aren’t the only bills you can possibly trim. Many lenders, servicers and utility companies have been offering “goodwill” programs that help those financially harmed by the pandemic.

When you make a list of all of your monthly bills, be sure to include firms you pay money to regularly — anyone from lenders and mortgage servicers, to banks and credit card issuers. It’s worth reaching out to see if you can take advantage of a payment forbearance plan or reduce your monthly bill entirely.

Many firms have already taken steps to help consumers who’ve taken a financial hit. Banks such as Capital One, Chase and Ally have suspended overdraft fees, while utility companies such as Verizon and AT&T will waive late fees or service cancellations. If you have a federally-backed mortgage and your income has been disrupted, you can request a payment forbearance plan spanning up to 180 days, thanks to the CARES Act. In most of these cases, though, you have to inform the company before you stop your payments.

6. Expand your network to widen your job search

Finding a new position at a time when unemployment is in the double-digits is difficult but not entirely impossible. Stay hopeful, and be creative with your job search. Consider tapping into and expanding your current network of contacts to learn of future opportunities. It pays to do your research.

“Look for any viable means of generating income, including finding another job,” says Mark Hamrick, Bankrate’s senior economic analyst. “Some businesses and sectors are faring better than others right now.”

7. Seek assistance from charities, local nonprofits, family members

Times are tough all across the nation, and many groups in your area might be trying to help. Nonprofit debt counseling groups could help you identify ways to address your individual financial needs, while some charities may be able to provide you a grant.

Those options include Humanity Forward, a nonprofit organization created by Andrew Yang that is giving individuals in need $1,000 cash stipends. Meanwhile, the American Red Cross is supporting food banks in local areas. It’s worth staying up-to-date on what’s out there for you.

8. Consider tapping retirement accounts

If you are still in need of more income, another route could be tapping into your retirement accounts, if it allows for what’s called a “hardship withdrawal.”

A second CARES Act provision allows individuals to withdraw up to $100,000, or 100 percent of their vested balance if it’s less than that headline amount. This option is available to you until Dec. 31, 2020, without penalty.

You’ll still need to pay income taxes on that money, but can do so over a three-year period. You can also pay back all or a portion of what you owe without it being counted against the maximum annual contribution limit.

Think of it in the sense of borrowing from one’s self, Hamrick says. Though it should be a last resort, given it could set you back a few years when it comes to your preparations for retirement. But it might be a more attractive option than taking out a loan with a higher interest rate or using a credit card.

9. Make sure you’re withholding taxes from UI

You might not know that you have to pay federal and, in some cases, state taxes on what you receive in unemployment benefits. Withholding that now, instead of pushing it down the road through a quarterly payment, might help prevent you from having to pay it at a time when you are more strapped for cash, especially after the $600 benefit ends. To do this, you’ll have to file a Form W-4-V.

“You’re going to have some sticker shock” if you wait, Evermore says.

10. Keep an eye on Capitol Hill

If unemployment remains as elevated as economists estimate, lawmakers may be on the clock to extend benefits again.

The unemployment rate surged to 14.7 percent, the highest since the Great Depression.


How soon that might be, or if it will happen, is still up in the air. The House of Representatives passed the HEROES Act on May 16, an even larger relief package than the CARES Act. It includes another round of stimulus payments, expanded health insurance coverage and a raise for essential workers, among other provisions. The bill, however, is unlikely to pass, with Senate Majority Leader Mitch McConnell (R-Ky.) voicing hesitation to approve another massive package until the economy’s reopening process is fully realized.

“But between the fact that it is an election year and that reports have recently indicated that some Republican members of the Senate are pressing for more immediate action, I’d lean toward the idea that more aid will be passed by both chambers,” Hamrick says.

Bottom line

Of course, no one can predict the future. That’s even more true for what goes on in Washington.

That’s why taking these steps — and other recession-proofing options in general — are crucial. Getting your finances in order now can help you build a solid foundation, in the unfortunate event that benefits aren’t extended. That way, you’re financially able to weather the storm until you find a new job.

“Predicting the behavior of elected officials in Washington, or elsewhere, is precarious,” Hamrick says. “Americans should prepare as if they might not get further benefits but keep an eye out for further developments.”

(Featured image by Brian van der Brug / Contributor / Getty Images)

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Written by
Sarah Foster
U.S. economy reporter
Sarah Foster covers the Federal Reserve, the U.S. economy and economic policy. She previously worked for Bloomberg News, the Chicago Tribune and the Chicago Daily Herald.