Benefits Which Can Assist Workers Under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act, H.R. 748)

These are the worker-related highlights of the bill that was passed by Congress, signed into law on March 27, 2020 and went into effect immediately.  The law also contains many deplorable handouts for big business that show the depth of corporate cronyism in Washington, DC. However, it does provide a down payment on the economic relief that working people need.

The following information describes those elements that will most directly assist the working class.  This is not an attempt to cover every detail of the various programs — UE staff can assist locals if more specifics are needed.

Expanded unemployment insurance

Unemployment insurance has been temporarily improved in several ways in order to deal with the historic spike in unemployment.  This includes:

  • Through the last full week of July, workers will get “enhanced” benefits, with the federal government contributing an additional $600 per week above the state level.
    • This means many lower-wage workers will get more money from unemployment than their former wages
    • This income is taxable, but is disregarded for the purposes of determining eligibility for Medicaid or CHIP (but not other means-tested programs, like SNAP).
    • Every worker entitled to unemployment, regardless of how little, qualifies for this $600 check.
  • Unemployment benefits have been extended to gig economy workers, freelancers, workers who have lost a part-time job, and those on unpaid FMLA due to COVID-19. These workers will receive the $600 check plus half of average unemployment benefits in their state.
  • The length of unemployment insurance has been temporarily expanded by 13 weeks. In most states this means access to 39 weeks unemployment, but this is not universal.  
  • Most states normally have a one-week waiting period to begin benefits. The bill contains funds to ensure that week is waived due to the public health emergency.
  • The act also includes several elements meant to allow employers to reduce hours, rather than laying off workers, with said employees getting a pro-rated unemployment benefit. However, this may not be available in all states.
  • Workers should apply for benefits through their state unemployment application, which should be available online.

Keeping American Workers Paid and Employed Act (Paycheck Protection Program)

Businesses and nonprofits that employ less than 500 workers can get forgivable loans, essentially grants from the federal government, through the Paycheck Protection Program. This will pay the payroll costs (including full salaries and health benefits) plus the utilities and rent or mortgage of the business for up to eight weeks and workers can be off work throughout that period. The loans are arranged through local banks to speed distribution but they are backed by the Small Business Administration. Funding is likely to be on a first-come first-serve basis and may dry up before long due to a cap on funding.

Direct payments to adults

The bill includes a one-time, $1,200 check for each adult making less than $75,000 annually, or $2,400 for each married couple making less than $150,000. For each child age 16 or under (i.e., who would normally qualify for a child tax credit), households get an additional $500. For higher income brackets the payment is slowly phased down, with individuals making more than $99,000 and childless couples making more than $198,000 not getting any benefit. Limits are a bit higher for families with children — reportedly $218,000 for a family of four. The benefit is not considered taxable income.

Even if you haven’t filed federal taxes in the past two years, you may be eligible for a check.  However, any adult dependants within a household (including college students) are not eligible for any payment (either $1,200 or $500). In addition, a valid Social Security number is required (excepting spouses of active-duty members of the military), which means most undocumented immigrants will not receive this benefit.

This payment is coming through the IRS. We will update this page with more information once the IRS has clarified more about payment distribution.

Aid to state governments should forestall immediate public-sector layoffs

Around $150 billion in federal money has been set aside for states, territories, and tribal governments to deal with ramifications from the COVID-19 public health emergency. This funding is intended to pay for necessary expenditures incurred in responding to the coronavirus outbreak — such as field hospitals and buying ventilators — along with paying for other essential government services not budgeted for in the wake of the economic downturn. While the funding offered to the states in this bill is likely insufficient to prevent public-sector layoffs in the longer run, it is a welcome lifeline for public budgets and public employees right now.  

Support for homeowners and renters

Several elements of the CARES Act provide added security for certain homeowners and renters. These include:

  • A 60-day moratorium on foreclosures for all homeowners with FHA, USDFA, VA, or 184/184A loans, or mortgages backed by Fannie Mae/Freddie Mac.
  • All homeowners with mortgages with similar federal backing can request a temporary postponement of payments for up to 180 days with no fees, penalties, or extra interest.
  • 90 days of postponement of payments for multifamily borrowers with federally-backed loans and financial hardship.
    • Landlords who accept this may not evict or charge late fees during the forbearance period.  
  • A 120-day period where landlords are prohibited from initiating legal action to recover a rental unit, or to charge fees, penalties, or other charges to a tenant on any property which is assisted in any way by HUD, Fannie Mae, Freddie Mac, the rural housing voucher program, or the Violence Against Women Act.

Assistance to students and former students

All student loans held by the federal government are deferred (including principal and interest) through September 30, 2020 without penalty to the borrower. Also, interest shall not accrue over this six-month period, any existing wage garnishment should end, and the six months of deferred payment should still count towards any loan forgiveness program.  

There are several other smaller elements which benefit students and former students, including:

  • Employer educational assistance programs can directly be used to repay student loan debt for the year 2020.
  • Universities may continue paying work study students even if the academic term has ended early due to COVID-19.
  • Any college students who dropped out of the current term due to COVID-19 are not required to return Pell Grants or federal student loans for that term, and it will not count against their limits in the future.