That extra $600 unemployment benefit may end sooner than many think

• The federal CARES Act coronavirus relief law authorized a $600 weekly enhancement to unemployment benefits through July 31. 
• However, all states will stop paying after July 25 or 26 due to administrative procedure, unless Congress passes legislation by then to extend the aid. 
• Without the $600 supplement, individuals can expect to get an average of $383 a week.

Enhanced unemployment benefits are likely ending sooner than many may realize. That could impose financial hardship on millions of families come month's end. 

The CARES Act, the federal coronavirus relief law enacted in March, gave an extra $600 a week in aid through July 31 to Americans receiving jobless benefits.

But, in all states, that subsidy will end this weekend — on July 25 or 26 — unless Congress passes legislation before then to extend the timeline, which looks increasingly unlikely.

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"I think people don't recognize they won't get the benefit the last week in July," according to Michele Evermore, a senior policy analyst at the National Employment Law Project, who said many are likely relying on those payments for rent, mortgages and other end-of-month bills.

"I think it'll come as an unwelcome shock," she said.

Payments are ending about a week earlier than the CARES Act allows due to the administrative calendar that states use to pay benefits.

States pay aid according to the timeline of a "benefit week."

All states have benefit weeks ending on a Saturday or Sunday. But July 31 falls on a Friday.

That means states must stop paying the $600 after this weekend in order to comply with the CARES Act, which requires the subsidy to end on or before July 31.  

Around 32 million Americans were collecting unemployment benefits as of June 27, according to the most recent data from the U.S. Labor Department.

They would continue to get standard state benefits, which averaged $383 a week in the first quarter of this year, according to the department. That amount would be a roughly 61% decrease in aid. 

'Tough choices'

Meanwhile, federal lawmakers are debating the contours of another coronavirus relief package.

Democrats have called for an extension of the weekly $600 supplement for jobless workers. Republicans have signaled they want those payments to end.

It's unclear what, if anything, would take their place if they disappear, but some Republicans have proposed a cash bonus for people who find new jobs or a reduced amount of aid.

Failure to pass legislation by this weekend would effectively mean the $600-a-week unemployment enhancement would lapse.

Every week they don't get that payments after July 25 or 26 is a week where workers and their families will have to make tough choices.

Ernie Tedeschi

labor economist at Evercore ISI

House Minority Leader Kevin McCarthy, R-Calif., doesn't expect legislation to pass until the first week of August, he told CNBC on Tuesday.

"Every week they don't get that payments after July 25 or 26 is a week where workers and their families will have to make tough choices about what spending they're going to cut, and that will have an effect on the economy and the recovery," said Ernie Tedeschi, a labor economist at Evercore ISI.

Congress may make any federal unemployment aid included in the next bill retroactive, meaning recipients could receive back pay for weeks going back to the end of July or early August.

However, that could mean Americans must endure a few weeks of financial hardship before being made whole, Tedeschi said.