LANSING — Unemployed Michiganders who find a job could get $1,000 as part of COVID-19 relief spending that began advancing in the state legislature this week.

The $12.7 billion proposal would help incentivize unemployed people to find jobs.

The “return to work” grants would cover up to 400,000 residents, which is nearly half of the 839,000 receiving unemployment benefits.

Michigan’s Chamber of Commerce said the incentive would also help businesses find workers, who are currently eligible for $662 a week in unemployment due to supplemental federal aid.

“The federal government has created a situation where it is in someone’s better financial interest to stay on unemployment than it is to take that next job,” Wendy Block, vice president of Business Advocacy and Member Engagement, said. “And that’s unfortunate.”

The provision is included in the supplemental budget bills that the Republican-led House Appropriations Committee approved on party lines earlier this week, but would still need to be approved by Governor Whitmer.

All but $1 billion in funding would come from federal COVID-19 packages that were approved in March and December.

Republican Rep. Thomas Albert of Lowell chairs the panel and said that if the $1,000 payments enticed even 10 to 20 percent of those on unemployment to go back to work, “that’d be a material difference in the state.”

Much of the federal money would be required to go to K-12 schools, local governments, child care, food and rental assistance, COVID testing and vaccine distribution if approved, but the state would still have flexibility with billions of dollars.

Under the proposal, the state would also pay nearly $600 million towards a Flint water crisis settlement instead of borrowing upfront and having to pay $1 billion over 30 years.