Virginia unemployment benefits fund projected to hit $0 in two months

Virginia's Unemployment Insurance Fund, which is used to pay state unemployment benefits, is "drained," says the Virginia Employment Commission is a press release today.

When the year started, the VEC says, the Fund had a balance of nearly $1.5 billion. But the Fund is expected to hit $0 in the next two months, and is on track to record a $750 million deficit by the end of the year, due to the increased number of claims since the start of the COVID-19 pandemic. In the last four months, over 1 million claims have been filed in Virginia, more than the number of claims filed from mid-2014 through 2019, says the VEC.

"In order to continue paying unemployment benefits, Virginia will need to borrow funds from the federal government," the VEC says. " The Unemployment Insurance Trust Fund is supported by taxes paid by employers. Because these taxes are based, in part, on a company’s history of laying off or reducing staff, the businesses most impacted by pandemic-related workforce reductions face the most significant increases in future Unemployment Insurance taxes."

The VEC is also reminding those receiving benefits that the $600 per week Federal benefit attached to Virginia benefits will end this week unless Congress votes to extend the program.

On July 28, VEC will coordinate the first Statewide Virtual Hiring Event to connect job-seekers with employers looking to fill open positions immediately. More than 1,000 job-seekers have registered, and more than 150 employers have registered to participate. For more information, visit https://www.vec.virginia.gov/node/12033.