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

NOTE, January 11, 2021: Please refer to our summary of the Coronavirus Response and Relief Appropriations Act for information on which provisions of these earlier pieces of legislation remain in effect. We will no longer be updating this page

This page was edited in September to reflect the benefits still available to working people as of September 1, 2020. When this legislation passed in March, we knew it would be insufficient to meet the needs of working people during the economic crisis caused by the pandemic. Unfortunately, Congress and the White House have failed to prioritize the needs of working people, and many of these minimal benefits are now gone (these are shown as struck-through below). Most of these remaining benefits will expire December 31, 2020. We need a robust federal response in order to prevent millions of Americans from being evicted from their homes, to keep food on the table and state and local government services operating, and to ensure the safety of our elections. Congress must pass a new bill to meet the needs of the millions of unemployed workers and all of us who are still facing the threat of this virus.

In early August, following the breakdown in talks for a replacement bill for the CARES Act (itself caused by the inability of elements in Trump’s negotiating team to meet halfway with Democrats in Congress), the Trump Administration issued four executive orders purportedly meant to address elements of the CARES Act which were expiring. These four executive orders include a totally toothless statement on evictions and an illusory payroll tax holiday not worth addressing here. However, a very limited (in duration and dollar value) continued expansion of unemployment, along with an extension of student loan deferment, do provide tangible benefits to some workers, and thus are mentioned in this updated summary.

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 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.

On August 8, the Trump Administration issued an executive order which institutes a much more limited version of expanded unemployment. This provides an additional $300 per week in federal funds, and gives states the option to fund an additional $100 in benefits themselves. However, this expansion contains several limitations that the CARES Act did not, including only being available for those currently receiving $100 or more in regular unemployment benefits. In addition the pool of funding used for said program is extremely limited, and expected to be exhausted after no more than five weeks. Most but not all U.S. states have applied for this more limited expansion, but the effective date varies from state to state, with some beginning to pay out benefits in late August and others not expecting to be ready until October. Much is still in flux, and will not be finalized until the program deadline September 10.

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

Businesses and nonprofits that employ less than 500 workers have been able to get forgivable loans, essentially grants from the federal government, through the Paycheck Protection Program. This paid for 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 were arranged through local banks to speed distribution but they are backed by the Small Business Administration.

While Congress extended PPP funding in two separate standalone bills, the ability of new businesses to enroll expired on August 8. However, it remains in effect for any businesses which have already qualified for loans.

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.

Approximately 10%-15% of qualified Americans have yet to receive direct payments.  If you have not received a payment, there are several steps you can take. Rather than directly call the IRS, it is suggested you first use the Get My Payment online tracking tool. Individuals who have not filed taxes in the past two years may also have to file some information online with the IRS in order to proceed.

Aid to state governments has held off major public-sector layoffs so far

Around $150 billion in federal money had 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 a welcome lifeline for public budgets and public employees right now, it is insufficient to prevent public-sector layoffs in the longer run. 

Further federal action is needed as soon as possible to provide direct aid to state and local governments.  If no such aid is forthcoming, it is likely there will be catastrophic levels of public-sector layoffs in many portions of the country.  This will also  result in a dramatic scaling-back of the social safety net during a time period Americans are more in need of government help than any time since the great depression.

Support for homeowners and renters

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

  • 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 December 31, 2020 without penalty to the borrower. Also, interest shall not accrue over this period. The CARES Act ended any existing wage garnishment (the new Trump Executive Order is silent on the matter). The first six months of deferred payment counted towards any loan forgiveness program, although once again, the Trump Administration does not appear to have addressed this in its extension of student loan deferment.

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.