Virginia's Unemployment Fund Close to Depletion

Date: June 17, 2020

State may need to borrow money in third quarter

The Virginia Employment Commission (VEC) recently presented a status on Virginia’s Unemployment Trust Fund to the House Appropriations Committee on June 15, 2020.  During the presentation, Commissioner Hess stated the following:

  • 822,300 initial unemployment claims have been filed since March 15. Approximately 75 percent of these claims have been approved and received payment
  • Almost $4 billion has been paid out in unemployment claims during the COVID-19 pandemic
  • VEC projects Virginia will pay just under $1 billion in benefits from the trust fund by the end of this quarter.
  • VEC projects Virginia will pay $2 billion in benefits from the trust fund by the end of the third quarter.
  • Due to the significant impact of claims due to COVID-19 on the trust fund, Virginia expects to borrow money from the federal government in the third quarter to continue to pay benefits. (This does not include the enhanced payments funded by the Federal CARES Act.)
  • Unless action is taken by Congress to forgive the Commonwealth’s loan for additional funds, the borrowed funds will need to be paid back by Virginia employers with increased taxes beginning in 2021.

You can see the full presentation HERE.

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