CARES Act: Unemployment Benefits

Due to the economic shutdown from the coronavirus, many Americans have been laid off, furloughed, or had their hours cut dramatically.

Typically, between 200,000 – 300,000 new people file for unemployment benefits each week, while a record-breaking 3.2 million filed for benefits with the week ending March 21, and that number will continue to go up as more and more companies are laying off or furloughing employees.

The passage of the CARES Act is opening up unemployment benefits for more people, increasing the length of time they can get unemployment, and increasing the amount they can get each week.

Who qualifies for unemployment benefits?

The CARES Act makes more people eligible for unemployment, including self-employed, gig workers (such as Uber or Lyft drivers), part-time employees, independent contractors, freelancers, and others. In many cases even workers who have had their hours cut, but are not totally unemployed, will qualify for partial benefits.

Career One Stop, which is an unemployment site sponsored by the U.S. Department of Labor, states that under the new law, states can pay benefits where, “An employer temporarily ceases operations due to COVID-19, preventing employees from coming to work; an individual is quarantined with the expectation of returning to work after the quarantine is over; and an individual leaves employment due to a risk of exposure or infection or to care for a family member. In addition, federal law does not require an employee to quit in order to receive benefits due to the impact of COVID-19.”

How much can I get in unemployment benefits?

The benefit level is determined by the state, with the lowest being Mississippi at $235 per week, and the highest being Illinois at $1,495 per week, with most states paying between $300-$500 per week.

Most states have a similar calculation – they take the worker’s highest earning quarter over the last year and divide that by 26, capped at a maximum amount. For example, if a worker earned $12,000 in their highest quarter, they would get $461 per week ($12,000/26 = $461). If their state caps benefits at $420, they would get $420 per week.

Under the CARES Act all those who are unemployed will get an additional $600 per week, which will last up to four months through July 31. In the previous example where an unemployed person was receiving $420 per week, they will now get $1,020 per week.

How long can I get unemployment benefits for?

Each state provides benefits for different lengths of time, but the average (before the CARES Act) was 26. Some states, such as Florida and North Carolina, only provided benefits for 12 weeks, while Massachusetts provided benefits for 30 weeks. The CARES Act extends unemployment benefits by an additional 13 weeks (making the maximum length in most states 39 weeks). The extended benefits will last through December 31, 2020.

The CARES Act also eliminates the one-week waiting period, which means you can get a check starting on the first week instead of the second week.

How do I apply for benefits?

Each state has a different process to apply. You can learn about unemployment benefits here and find a list of state offices here.

Looking for a job

While many employers have had to lay off employees, others are hiring part and full-time workers, including Amazon, Costco, CVS, pizza chains, Dollar General, Walmart and more. USA Today has an article that links to many of the major employer’s websites who are hiring. Be sure to check in your local community and state as well. Many communities have Facebook pages where employers looking for help post the job.

Small business forgivable loans

If you own a small business (from one employee up to 500 employees), you can apply for a loan through the Small Business Administration, and, if certain stipulations are met, that loan can be forgivable. The loans can be used to pay payroll, payroll expenses (such as health insurance), interest on mortgage loans, rent, and a few other expenses. Small business owners can learn more and apply for a loan here.

 

For more personalized information on your specific situation, please make a free and confidential appointment with one of our financial coaches in UVU’s Money Management Resource Center! We are happy to help you!


NOTE: Please go to https://ryanhlaw.com/coronavirus-articles/ for new updates on this article or to read other articles pertaining to the CARES Act.

 

About the author:

Ryan Law

 

 

 

 

 

 

 

 

 

Ryan Law is an award-winning educator who is passionate about simplifying personal finance so individuals can take small steps to make positive changes in their finances. As a professional CERTIFIED FINANCIAL PLANNER, an Accredited Financial Counselor and with a master’s in Personal Financial Planning, Ryan runs Utah Valley University’s on-campus Money Management Resource Center and teaches financial counseling courses in the Financial Planning program. He has been married to his beautiful wife Traci since 1999 and they have five wonderful children.