Federal Unemployment Benefits Cut Off for Anyone Earning $1 Million in Base Period Wages

The aptly named Ending Unemployment Payments to Jobless Millionaires Act of 2025 is pretty straightforward: it uses a hard income ceiling to determine who can collect federal unemployment benefits. If you earned $1 million or more during your “base period”—the time used to calculate your benefits—then federal money cannot be used to pay your unemployment checks. This rule applies to benefits for former federal employees, service members, and all federal extensions, like Extended Benefits (EB) or any temporary federal increase to weekly payments.

The Million-Dollar Line in the Sand

The core of the bill is setting a strict disqualification threshold. Essentially, if your W-2s and 1099s added up to seven figures in that base period, you are out of the federal unemployment system, regardless of your current financial situation or how long you’ve been out of work (Sec. 2). This means that even if you were eligible for a federal extension program after exhausting your state benefits, you’d be cut off. For the super-high earners, the bill ensures that the federal safety net is reserved for those with lower prior incomes.

New Paperwork and State-Level Scrutiny

To make this work, the bill creates two new administrative hurdles. First, anyone applying for federal unemployment benefits must sign a form certifying that their base period wages were less than $1 million. Second, the state agencies handling the claims must use their existing systems to verify this income against the $1 million limit “to the extent practicable” (Sec. 2). This is where things get tricky for states. Unemployment agencies are already stretched thin, and verifying income across different data sources for every applicant adds a new layer of mandatory work. If a state messes up and pays someone who shouldn't have qualified, the bill mandates that the state agency must then recover that money from the claimant.

Why This Matters to Everyone Else

While this bill targets a small demographic, it has broader implications for how the unemployment system operates. It’s a clear message about who the federal safety net is designed to protect. But it also introduces potential friction points. If state agencies don't have seamless access to comprehensive wage data, they might struggle to accurately enforce the $1 million limit, leading to either wrongful payments that need to be recovered or delays in processing claims while they try to verify income. The bill also explicitly blocks the Secretary of Labor from issuing any guidance that would stop a state from enforcing this $1 million disqualification, essentially tying the hands of the federal agency that oversees the unemployment system (Sec. 2).

Ultimately, this legislation aims to tighten eligibility for federal unemployment programs by excluding the highest earners. While the benefit is clear—federal dollars aren't going to people who just made a million bucks—the challenge lies in implementation. State agencies now have a new mandate to verify high incomes and chase down any money paid out incorrectly, which could mean new administrative costs and potential headaches for the systems that process benefits for everyone else.