April 20, 2020
The recently passed “Coronavirus Aid, Relief, and Economic Security Act” or “CARES Act” has many implications. In recent weeks, we have released resources pertaining to individuals/families as well as businesses. Today, we would like to give a brief description of some of the unemployment benefit provisions. As of March 27, the CARES Act expands current unemployment benefits in two major ways: (1) provides for an extra $600 weekly payment, in addition to the weekly benefit amount an eligible employee would otherwise receive under state law; and (2) allows for an additional 13 weeks that an individual may receive benefits.1 Additional details on these provisions are summarized below:
Federal Pandemic Unemployment Compensation: Individuals who are eligible for unemployment benefits under state or federal law will receive $600 per week in addition to their regular unemployment compensation under state law between April 5, 2020 and July 31, 2020.
Pandemic Unemployment Emergency Compensation: The federal government is funding up to 13 weeks of additional unemployment benefits through December 31, 2020 for individuals who remain unemployed after state unemployment benefits are exhausted, thereby increasing benefits to a maximum total of 39 weeks.2 Any of the additional 13 weeks of benefits received prior to July 31, 2020 should include the extra $600 payment. This will be funded by the federal government but be administered at the state level.
Pandemic Unemployment Assistance: Individuals who are (1) not otherwise eligible for benefits under state law (examples include self-employed, independent contractors, non-traditional workers, or people who have limited work histories) or have exhausted all rights to unemployment benefits; and (2) are unemployed, partially unemployed or unable to work because of any of the following coronavirus (COVID-19)-related circumstances:
1. Benefits will equal the weekly benefit that the individual otherwise would receive under state law plus the additional $600 weekly payment through July 31, 2020, up to a maximum of 39 weeks between January 27, 2020 and December 31, 2020.
2. Must meet one of the following requirements:
- Has been diagnosed with coronavirus or is experiencing symptoms of coronavirus and is seeking a medical diagnosis;
- Has a member of the household diagnosed with coronavirus;
- Provides care for a family member or household member who has been diagnosed with coronavirus;
- Is the primary caregiver for a child or other person in the household who is unable to attend school or another facility that has been closed as a direct result of coronavirus and such school or facility care is required for the individual to work;
- Is unable to reach the place of employment because of a quarantine imposed as a direct result of coronavirus;
- Is unable to reach the place of employment because a health care provider has advised the individual to self-quarantine due to coronavirus concerns;
- Was scheduled to begin new employment and does not have a job or is unable to reach the job as a direct result of coronavirus;
- Has become the breadwinner or major support for the household because the head of the household has died as a direct result of coronavirus;
- Has been forced to quit a job as a direct result of coronavirus; or
- The place of employment is closed as a direct result of coronavirus.
Individuals who can telework for pay, or who are receiving paid sick leave or other paid leave benefits, are not eligible to receive benefits.3
One-Week Waiting Period: The CARES Act does not eliminate the state law waiting periods for regular unemployment benefits, but it heavily incentivizes states that ordinarily have a one-week waiting period to waive that requirement. Under the Act, the federal government will reimburse 100% of the benefits paid during the first week of an individual’s unemployment if a state waives its waiting period.4
If you would like more information on the unemployment provisions of the CARES Act, you can click here for the Department of Labor’s online resources.
If you have any questions about how these provisions can affect your personal financial plan and would like to speak to a Ronald Blue Trust advisor, please call 800.987.2987 or email [email protected].
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2Each state sets the maximum period an individual can receive unemployment benefits which may be less than 39 weeks. For a listing of the absolute maximum for each state, please visit: www.savingtoinvest.com/maximum-weekly-unemployment-benefits-by-state/