- The Pay Advance Earnin app is rolling out a new feature that allows people to access unemployment benefits earlier.
- Earnin says it is the first company in the industry to offer early access to unemployment benefits.
- Almost 10 million people filed for unemployment in March. Congress just passed a historic improvement in unemployment benefits as part of its $ 2 trillion coronavirus stimulus bill.
- Unemployment checks could take months to arrive for millions of Americans, but many will need the money sooner.
- Visit the Business Insider homepage for more stories.
As millions of Americans need immediate financial assistance amid closures linked to the coronavirus outbreak, a company is promoting a new feature to give people immediate access to unemployment benefits. early way.
The number of unemployed hit record highs last month, with nearly 10 million Americans recently filing for unemployment. Congress recently passed a landmark $ 2 trillion stimulus package that includes a $ 600 weekly increase in unemployment benefits for up to four months. The bill also provides for a one-time stimulus check of $ 1,200 for all Americans.
Earnin, an app that lets users prepay on paychecks, is launching a new feature that will roll out in mid-April, the company told Business Insider. Earnin says it is the first company in the industry to offer early access to unemployment benefits. But Earnin’s new feature won’t include early access to $ 1,200 stimulus checks because it’s too hard to predict when they’ll arrive, according to the company.
“We believe this is an industry first and demonstrates how Earnin deploys engineering and product resources to meet the rapidly changing needs of people who find themselves in a new revenue environment,” CEO and founder Ram Palaniappan said in a statement to Business Insider.
People who are already using Earnin will have access to the feature once their first unemployment payment reaches their bank account. New members will be able to contact the Earnin team directly to verify that they are entitled to unemployment benefits before accessing the money earlier.
The app does business by checking users’ employment status and then allowing them to withdraw money from the app before their paycheck, encouraging users to add a “tip.” Earnin then automatically withdraws that money, along with the tip, from the user’s bank account on payday.
There is no clear timetable for when unemployment benefits or stimulus checks will be available to people who have just applied. Some will receive benefits as early as next week, but for about 70 million Americans who don’t yet have direct deposit information on their records, benefits could take at least a month to arrive, according to a researcher estimate. Brookings Institute Economic Studies, Aaron Klein. .
It’s inevitable that online companies like Earnin will rush to provide salary advances, Klein says, given how long it will take for stimulus payments to reach Americans.
“Policymakers operate under the false assumption that the federal government can quickly put money in the hands of people who have been affected by COVID
Klein told Business Insider. “People can’t wait months to get a paper check when they have to pay their bills today.”
While Earnin insists it does not provide payday loans – the “tip” users pay is not a flat rate and can be reduced to zero – reviewers have said the app is functionally a payday lender. Democratic and Republican lawmakers have criticized payday lenders in recent years for making money from people seeking stimulus funds or early government benefits.