We all have read about The CARES Act – which was passed in March 2020 amidst the onset of COVID-19. The package included over $2 trillion in economic relief for businesses, workers, families, and governments.
Now that the year is almost over, some benefits included in the CARES Act are expiring. Many Americans have relied on these benefits to make ends meet throughout the course of the pandemic, and there’s widespread uncertainty about benefits coming in the future.
So unless Congress takes action, here’s a little checklist in case YOU need to take action:
BENEFIT 1: PANDEMIC UNEMPLOYMENT ASSISTANCE
The Pandemic Unemployment Assistance program, or PUA, gives states the ability to provide “unemployment” benefits to those who don’t qualify for regular unemployment. This includes individuals that are self-employed, independent contractors, or gig economy workers.
BENEFIT 2: EXTENDED FEDERAL UNEMPLOYMENT BENEFITS
The CARES Act also enhanced regular unemployment benefits. Thanks to Pandemic Emergency Unemployment Compensation, individuals have been able to collect federal unemployment benefits for up to 39 weeks rather than the standard 26.
BENEFIT 3: $300 EXTRA UNEMPLOYMENT BENEFIT
Although it was valued at $600 for the first few months of the pandemic, individuals collecting unemployment benefits have been receiving a $300 bonus unemployment check weekly.
BENEFIT 4: PROTECTIONS AGAINST EVICTIONS
Extended by the CDC through Dec. 31, there are currently protections against evictions for failure to pay rent in order to prevent the spread of COVID-19. This prevents a landlord or owner from evicting a “covered” person from a residential property due to the tenant’s inability to pay rent.
BENEFIT 5: STUDENT LOAN DEFERMENTS
Another extended portion of the CARES Act, this stipulation allowed those with student loans to defer payments until Dec. 31. Unless further action is taken, these deferments may no longer be an option and interest will resume being charged.
BENEFIT 6: THE 10% PENALTY EARLY WITHDRAWAL PENALTY WAIVER
Usually, a 10 percent penalty applies to those under age 59.5 who take retirement account withdrawals. In 2020, those affected by COVID (in some way) were not penalized, which made for some flexible planning opportunities. As far as we know, this penalty will be reinstated come 2021.
WHAT CAN YOU DO?
If you’ve been depending on many of these benefits financially, the end of the year seems daunting. It’s difficult to say if benefits will be extended or new benefits introduced. Assuming these benefits are ending permanently for the time being, here are some measures you can take to prepare.
- MAKE A PLAN. Easier said than done, but this is the most important task. Talk to your family and loved ones and make a plan to conserve your finances. Maybe this means you have to cut your spending, alter how you’re allocating your company’s budget, or temporarily move in with family – whatever your plan of action may be, just make sure you have one.
- KEEP AN EYE OUT FOR POLICY CHANGES. This may not be the end of your benefits. Always stay aware of what’s going on in policy, on both the state and federal levels, so you can remain on top of the situation.
- BE FLEXIBLE. This has been important throughout the entire pandemic. In such uncertain times, many people are needing to get creative to preserve financial security. Perhaps you need to adapt your business to a remote environment or set a budget for your family members. Be flexible and patient, and encourage the same from others.
The state of the economy, and particularly the policies instated in response, have instilled uncertainty nationwide. If you’re depending on CARES Act Benefits, don’t get caught off guard when they expire. Get informed about the situation, understand how it affects you, and have a plan as we go into the new year.
Any questions? Feel free to reach out.