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As millions of Americans filed for unemployment benefits in March, Congress passed a massive stimulus package that, among other things, included funding that expands unemployment benefits for those out of work.
The $2.2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act adds to existing unemployment benefits, giving jobless Americans an extra $600 a week through July 31, 2020. The new law also expands the list of workers eligible to receive benefits to include Americans who usually don't qualify—such as freelancers, gig workers and caregivers—if their employment was affected by the coronavirus.
If the coronavirus outbreak contributed to you losing your job, you may be eligible to collect unemployment benefits to help you get through this tough economic time. Read on for more information on how the new economic stimulus law might be able to help you.
How Does Unemployment Work?
Unemployment insurance is given to jobless workers who qualify under their state's requirements. Typically, unemployment benefits are calculated based on your previous income and pay you a portion of your past earnings for a set period of time. Unemployment insurance benefits are determined by your state based on federal guidelines, but states use different formulas to determine how much you'll receive.
How Does the Economic Stimulus Affect Existing Benefits?
The CARES Act significantly expands existing unemployment benefits in three ways:
1. Recipients Receive an Extra $600 a Week
Those approved for unemployment insurance will receive an extra $600 each week on top of the benefits they get from their state. In New York state, for example, if you're eligible to receive the maximum unemployment benefit amount of $504 per week, the CARES Act adds an additional $600 to that figure, making your weekly income $1,104.
If you are already approved for unemployment insurance from your state's labor department, you won't have to do anything to receive the extra $600 per week. If you are not already enrolled and approved for benefits in your state, you must do so to be eligible under the new provisions. This benefit began on March 27, 2020, and will last until July 31, 2020. Contact your state's labor department for state-specific information.
2. More U.S. Workers Are Eligible for Benefits
Through the Pandemic Unemployment Assistance (PUA) program, the CARES Act expands the list of eligible recipients, adding those who may not typically be eligible for unemployment insurance. The following workers could now be eligible to receive state unemployment benefits as well as the extra $600 per week:
- Self-employed
- Independent contractors
- Furloughed workers
- Employees of religious institutions
- Workers and caregivers affected by the coronavirus
Others who may be eligible for benefits due to effects of the outbreak include those diagnosed with the coronavirus; primary caregivers for a child unable to go to school; those whose place of employment closed as a result of the coronavirus and others. For a full list, see this PUA resource.
If you're newly eligible for unemployment benefits under PUA, you can find your state's unemployment office at the U.S. Department of Labor's Unemployment Benefits Finder page. Here you'll get links to resources on what you need to do to apply for benefits. Once approved, you will begin to receive both state and federal benefits.
3. Benefit Timeline Extended for Some
For anyone who exhausts their unemployment benefits (most states offer 26 weeks of unemployment benefits), the CARES Act makes them eligible for an extra 13 weeks of state benefits—as well as the additional $600 provided by the federal stimulus.
This extended timeline gives jobless Americans a little more wiggle room, as well as offering extra benefits to people who have already exhausted their benefits and may have trouble finding work in the current economic climate.
Financial Tips to Help While You're Unemployed
Being out of work can be tough, but there are certain things you can do to ease some of the financial pressure.
- Make a budget. This is a sound financial strategy at any time, but especially now, it can help you allocate your income in the best way possible. Use your budget to portion out your spending, and make sure to give priority to the things that are essential for your daily life.
- Plan for your debt payments. If you have the means, plan to make at least the minimum payment on all your bills so you don't miss a bill or pay late. If you're struggling to pay the minimum, contact your creditor to see if it provides a program or option that could help you. If your finances have been impacted by the coronavirus, check out this list of financial and non-financial institutions that are offering relief during this time.
If you don't think you'll be able to keep up with your bills, you can also contact a nonprofit credit counselor. Credit counselors help you assess what debt you have and, if necessary, can put you on a debt management plan to help you repay your debts. Consider this option after first checking with your creditors to see if any relief options they are offering could help you get through this time. If you think credit counseling may be a good option for you, go to the National Foundation for Credit Counseling website to get started. - Know your options. If you are receiving or plan to receive unemployment benefits, know that there may be additional relief options if you still need help to fill any gaps from lost income. For example, you may be able to find community or local support from places like food banks, religious organizations, schools and more.
Finally, if you feel the need to rely on a credit card or personal loan to help you get by in the short term, try to use one with the lowest interest and stay on top of payments by using auto pay or setting due date reminders. Taking on new debt should be a last option, but in a pinch, it could help you make sure you have everything you need.
Navigating Unemployment Benefits
Keep in mind that while the federal benefits included in the CARES Act will apply to all unemployment recipients, you must first be approved and enrolled to receive benefits in your state in order to receive the full scope of the additions. Payment start dates will vary by state, so make sure to verify with your unemployment office so you know when to expect your money.
For more information on your state's unemployment benefit program, visit the U.S. Department of Labor's website for more information on your state. For more information on unemployment benefits expanded by the CARES Act, please see this government fact sheet for full details. You can find the full text of the law on the Congress.gov website.