CARES ACT and Unemployment Program Changes (FAQ)
The CARES Act temporarily expanded the unemployment program to address the unprecedented layoffs and furlough as a result of COVID-19 shutdown. This new plan wraps in far more workers than are usually eligible for unemployment benefits, including the self-employed, gig/contract workers, part-time employees, and new entrants to the workforce.
Please keep in mind that workers who can work from home, and those who are receiving paid sick leave or paid family leave are not covered.
Both the New York Times and Idaho’s Department of Labor created a helpful FAQ online. For your convenience, we have compiled and organized the details below.
Original Articles:
F.A.Q. on Stimulus Checks, Unemployment and the Coronavirus Plan by New York Times
Claimant FAQs about Unemployment Insurance and COVID-19 by Idaho Department of Labor
COVID-19 information by Washington State Employment Security Department
THE DOLLAR AMOUNT
Q: How much will I receive?
It depends on your state.
“Benefits will be expanded in an attempt to replace the average worker’s paycheck,” explained Andrew Stettner, a senior fellow at the Century Foundation, a public policy research group. The average worker earns about $1,000 a week, and unemployment benefits often replace roughly 40 to 45 percent of that. The expansion will pay an extra amount to fill the gap.
Under the plan, eligible workers will get an extra $600 per week on top of their state benefit. But some states are more generous than others. According to the Century Foundation, the maximum weekly benefit in Alabama is $275, but it’s $450 in California and $713 in New Jersey.
So let’s say a worker was making $1,100 per week in New York; she’d be eligible for the maximum state unemployment benefit of $504 per week. Under the new expansion, she gets an additional $600 of federal pandemic unemployment compensation, for a total of $1,104, essentially replacing her original paycheck.
States have the option of providing the entire amount in one payment, or sending the extra portion separately. But it must all be done on the same weekly basis.
ELIGIBILITY
Q: Are gig workers, freelancers and independent contractors covered?
Yes, self-employed people are newly eligible for unemployment benefits.
Benefit amounts will be calculated based on previous income, using a formula from the Disaster Unemployment Assistance program, according to a congressional aide.
Self-employed workers will also be eligible for the additional $600 weekly benefit provided by the federal government.
Q: What if I’m a part-time worker who lost my job because of a coronavirus reason, but my state doesn’t cover part-time workers? Am I still eligible?
Yes. Part-time workers are eligible for benefits, but the benefit amount and how long benefits will last depend on your state. They are also eligible for the additional $600 weekly benefit.
Q: What if I‘m temporarily laid off because the place where I work is temporarily closed due to the COVID-19 virus?
An individual temporarily laid off may qualify for benefits if he or she was able, available for and actively seeking work or returning to work with their employer.
Q: What if I have COVID-19 or need to care for a family member who has it?
If you’ve received a diagnosis, are experiencing symptoms or are seeking a diagnosis — and you’re unemployed, partly unemployed or cannot work as a result — you will be covered. The same goes if you must care for a member of your family or household who has received a diagnosis.
Q: What if my child’s school or day care shut down?
If you rely on a school, a day care or another facility to care for a child, elderly parent or another household member so that you can work — and that facility has been shut down because of coronavirus — you are eligible.
Q: What if I’ve been advised by a health care provider to quarantine myself because of exposure to coronavirus? And what about broader orders to stay home?
People who must self-quarantine are covered. The legislation also says that individuals who are unable to get to work because of a quarantine imposed as a result of the outbreak are eligible.
Q: I was about to start a new job and now can’t get there because of an outbreak.
You’re eligible for benefits. You will also be covered if you were immediately laid off from a new job and did not have a sufficient work history to qualify for benefits under normal circumstances.
Q: I had to quit my job as a direct result of coronavirus. Would I be eligible to apply for benefits?
It depends. Let’s say your employer didn’t lay you off but you had to quit because of a quarantine recommended by a health care provider, or because your child’s day care closed and you’re the primary caregiver. Situations like that are covered.
But this provision wasn’t intended to cover people who quit (or want to quit) because they fear that continuing to work puts them at risk of contracting coronavirus, according to congressional aides.
Q: My employer shut down my workplace because of coronavirus. Am I eligible?
Yes. If you are unemployed, partly unemployed or unable to work because your employer closed down, you’re covered under the bill.
Q: The breadwinner of my household has died as a result of coronavirus. I relied on that person for income, and I’m not working. Is that covered?
Yes.
Q: I’m already receiving unemployment benefits. Will I receive any help?
Yes. Even if you’re already receiving unemployment benefits for reasons unrelated to the coronavirus, your state-level benefits will still be extended by 13 weeks. You will also receive the extra $600 weekly benefit from the federal government.
Q: My unemployment recently ran out — could I sign up again?
Yes. If you’ve exhausted your benefits, eligible workers can generally reapply. But how much you get and for how long depends on the state where you worked. Everyone gets at least another 13 weeks, along with the extra $600 payment through July 31.
CARES ACT SPECIFICS
Q: How long will the payments last?
Many states already provide 26 weeks of benefits, though some states have trimmed that back while others provide a sliding scale tied to unemployment levels.
The bill provides all eligible workers with an additional 13 weeks. So participants in states with 26 weeks would be eligible for a total of 39 weeks. The total amount cannot exceed 39 weeks, but it may be shorter in certain states.
The extra $600 payment will last for up to four months, covering weeks of unemployment ending July 31.
Q: How long would the broader program last?
Expanded coverage would be available to workers who were newly eligible for unemployment benefits for weeks starting on Jan. 27, 2020, and through Dec. 31, 2020.
Q: Are any unemployment benefits retroactive?
Maybe. If you are newly eligible for benefits, you may be able to claim state-level benefits retroactively, back to Jan. 27. But it will ultimately be determined by your state, which will consider the date that you became unemployed and any extenuating circumstances that prevented you from filing earlier, according to a representative for the Department of Labor.
People who are already receiving unemployment will not get any retroactive benefits. If your benefits run out, you’ll be eligible for the added 13 weeks of state-level benefits (as long as you continue to meet the eligibility criteria).
The extra $600 payment being paid by the federal government is also not retroactive.
Q: Will this income disqualify me from any other programs?
Maybe. The additional $600 benefit counts as income when determining eligibility for means-tested programs, except for Medicaid and the Children’s Health Insurance Program, known as CHIP.
Q: How long will I need to wait for benefits?
States have been incentivized to waive the one-week waiting period, but it’s unclear how long it will take to process claims — especially with state offices so strained by a flood of them.
FOR WASHINGTON RESIDENTS SPECIFICALLY:
Q: When should I apply for unemployment?
We are asking only those eligible for regular unemployment, not those newly eligible under the federal CARES Act, to apply as soon as possible. If you became eligible when unemployment was expanded by the federal government in response to COVID-19 (under the CARES Act) please do not apply until after April 18 when our system is updated. You will be paid retroactively after our systems are updated for the new federal legislation.
Take a look at this handy eligibility checker to learn more about your eligibility and when to apply.
Q: I can’t afford to wait to get paid, I have bills due now. What am I supposed to do?
We understand how important it is to get these payments to you as quickly as possible, and we are doing everything we can to get you the help you need. Many options are available to help you and your family in this crisis, many of which you can find on the state coronavirus response website (coronavirus.wa.gov). This includes information about dozens of services available to you and your family – from food, childcare and housing assistance to healthcare options, internet access, legal aid and much more. There are also important emergency measures the Governor has put in place to provide relief to you in this crisis, including
A temporary moratorium on evictions for renters.
Help with utilities.
Cash assistance for families with and without children.
Free school lunches.
Again – please check out this page on the coronavirus response website for more programs and services available to you and your family.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.