An extra $300 in weekly benefits could start reaching out-of-work Minnesotans by the end of next week, though state officials said Friday that the new funds from the U.S. government may not last long.
The Minnesota Department of Employment and Economic Development (DEED) estimates the additional boost will last five to eight weeks. Because the payments are retroactive to Aug. 1, that means they may only last through September.
About 330,000 Minnesotans are expected to receive the supplemental funds.
"We'll get this money out as soon as we can," DEED Commissioner Steve Grove said. "We know how important it is. It is for a limited window, but every penny matters."
The additional payments are a partial replacement for the extra $600 a week unemployed workers had been receiving throughout the coronavirus pandemic as part of the federal CARES Act.
But that benefit, which had been helping keep many unemployed workers afloat, expired at the end of July. In the meantime, Democrats and Republicans have been unable to agree on a new coronavirus relief package.
So earlier this month, President Donald Trump signed an executive order authorizing an additional $300 to $400 a week for unemployed workers to be paid out of a $44 billion disaster relief fund through the Federal Emergency Management Agency (FEMA). States have to apply to the program and have been working through other logistical issues in order to get the funds out.
Gov. Tim Walz submitted Minnesota's application on Friday morning.
About 35 other states have already applied and been approved to be part of the Lost Wages Assistance program. And at least five states — Arizona, Louisiana, Missouri, Tennessee and Texas — have already begun disbursing the funds to their residents. But it could take some other states weeks to start paying it out as they work to update their computer systems. A few states, such as South Dakota, have decided not to apply at all.
Grove said the state clarified with FEMA early on that it would not be penalized or not get its full share of the funds for waiting to apply as long as it met the Sept. 10 deadline.
"Our application was submitted in plenty of time to take full advantage of the benefits," he said. "This isn't a first-come, first-served kind of competition between the states to sign up. As long as you're in by Sept. 10, you will get the money your state deserves."
He said the state took some time to analyze the program, which has a lot of complex administrative details, before applying. State officials also decided to brief legislative leaders about it first to make sure they had bipartisan support for it.
Now, he said the state is set up to quickly disburse the funds to Minnesotans once the state's application is approved and the money is transferred from the federal government. If all goes as expected, he said the first payment should start showing up in Minnesotans' accounts by the end of next week or the beginning of the following week.
States will initially receive funds to cover three weeks. Payments after that will continue until the fund runs out.
The first three weeks of payments, for July 26-Aug. 1, Aug. 2-8 and Aug. 9-15, will arrive as an initial lump sum for Minnesotans, so as much as $900 at once.
That's welcome news to Adrian Lopez-Balbontin, who lost his job in March as a server at Red Stag Supperclub in northeast Minneapolis. His theater company, BAND Group, where he was the founding artistic director, has also ceased operations during the pandemic.
"If this didn't come through from the state now, there would have been real issues I'd have to contend with come mid-September," he said.
He's planning to ask his landlord for a week or two reprieve for next month's rent until the extra $900 shows up in his bank account. He added that he hopes that this is a stopgap and that Congress is able to reach a compromise on a longer-term solution.
At a news conference, Lt. Gov. Peggy Flanagan voiced a similar hope, saying the extra $300 will provide emergency help for Minnesotans but is not enough.
"To be clear, an extra $300 per week is not a reflection of the entirety of the burden of this pandemic on Minnesotans," she said. "We hope that our federal partners will be able to come together to provide a well-planned and thorough relief for Minnesotans and other Americans in need."
Unemployed workers do not have to do anything different to receive the additional $300 a week. They will automatically receive the funds if they are eligible and already receiving unemployment benefits. People who have recently found a job, but were receiving benefits in the first weeks of August, will also receive the money.
In order to qualify for the additional $300, recipients must have lost work because of the pandemic and be receiving at least $100 in state unemployment benefits. The latter requirement is expected to make 4 to 5% of Minnesotans now receiving benefits ineligible for the program.
While states have the option of kicking in an extra $100 for a total supplemental payout of $400 a week, only a couple of states have gone that route. Many are facing tight budgets or deficits.
Minnesota's unemployment rate, which peaked in May at 9.9%, fell to 7.7% last month.
The state has recovered about one-third of the jobs lost so far during the pandemic, but the rebound in jobs slowed last month after a bigger bounceback in June once more businesses were able to reopen at limited capacities.