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A new $900 billion stimulus and economic relief package extends unemployment benefits for millions of Americans in need.
The new measure provides unemployment pay for people whose extended benefits expired Dec. 26, and prevents an unemployment cliff that would have been “economically insane,” Andrew Stettner, an unemployment researcher, told NextAdvisor earlier this month.
Still, a lot of logistics for these programs await guidance from various agencies, like the Department of Labor.
The new benefits will take some time to kick in, says Elizabeth Pancotti, a policy advisor at Employ America, a labor policy think tank. Many workers could see a lag in unemployment payments. Pancotti and Stettner co-authored a widely read report in November on the looming unemployment cliff for The Century Foundation, another labor policy firm.
Here’s what you need to know about the new measures:
Extended Unemployment Benefits
This extended federal aid is on top of state unemployment programs that unemployed people may still get help from.
Who qualifies for extended unemployment benefits?
The package establishes a temporary supplemental $300 per week in unemployment benefits for all unemployed workers, a decrease from the $600 in additional benefits provided to unemployed workers by the CARES Act that ended in July.
It also extends two programs, The Pandemic Unemployment Assistance (PUA) and the Pandemic Emergency Unemployment Compensation (PEUC). The PUA program provides benefits for self-employed workers, freelancers, and other gig workers who typically aren’t eligible for state unemployment benefits, and the PEUC allows states to provide up to 13 weeks of federally funded unemployment benefits to those who have already used all available state benefits.
If you qualify for any unemployment checks from your state or these federal programs, you will also be eligible for the $300 weekly boost.
How long will extended unemployment benefits be available?
The extended $300 benefit will be available to unemployed workers for an additional 11 weeks, through March 14, 2021. The package strikes the 39-week maximum for receiving benefits established in the CARES Act. It’s now a 50-week maximum. If you haven’t hit that maximum by March 14, you can receive aid as late as April 5, after which there will be no further payments.
No new applications will be accepted after March 14.
When will new unemployment benefits start being paid?
“Payments for the next few weeks are going to be in limbo,” says Pancotti. “Workers should anticipate a couple of weeks in January without pay and with delayed payments.”
For weeks where you are eligible for the enhanced $300 benefits, but are not paid because the system is backed up, you will get back pay for those eligible weeks. But that means you’ll probably go a few weeks without assistance.
“You will get a lump sum check of however many weeks it takes, but it will affect many people’s finances,” says Pancotti. “People need to know that the check they think is coming to pay their rent in January is probably not coming.”
What if you’re unemployed but not currently receiving benefits through the PUA or PEUC program?
If you are unemployed and not receiving benefits through PUA and PEUC, then your first step is to apply for benefits through your state’s unemployment program. The PUA and PEUC exist to extend benefits to workers who wouldn’t usually qualify, and to prop up state programs by providing additional funds after you’ve used the maximum amount of benefits available from your state.
You’ll still get that $300 extra benefit once you qualify for a state unemployment program.
What if I have a side hustle that isn’t taken into account with my unemployment insurance?
If you have a wage job and you’re self-employed or are a gig worker (i.e. you drive for Uber, freelance, contract, etc.), then you could be eligible for a $100 boost on top of the $300 benefit.
But you must have made at least $5,000 in income from your self-employment in 2019.
What if your unemployment benefits run out before new benefits and additional stimulus payments are received?
Unemployment benefits for millions of Americans are set to expire on Dec. 26. With uncertainty around exactly when those benefits and stimulus payments could hit your account, millions of Americans still may face a lapse in benefits.
If this applies to you, make sure you’ve covered all of your bases and start taking steps now to prepare.
The new package also includes direct one-time stimulus payments. Every American will be eligible for up to $600, or $1,200 for joint filers. The payments will decrease for Americans who earned more than $75,000 in 2019, or joint filers who earned $150,000. Parents will also receive $600 per dependent child.
What if I made less money this year — do I qualify for more stimulus?
Yes. If your income was lower this year than your previous year on file with the IRS, you can claim that money back on your taxes. For example, if you made $150,000 in 2019 income, but you were laid off in the first round of layoffs in 2020 and only made $20,000 this year, you can recoup that difference.
“File early and file electronically, the IRS does plan to get these funds out,” says Pancotti.
How and when will new stimulus payments be paid?
If you qualify for a stimulus check, you will be paid electronically by direct deposit through the Automated Clearing House (ACH) network.
If you qualified for the last round of stimulus payments, and your direct deposit information is already in the system, you could expect your payment in as soon as 10 days, the IRS estimates. If you are not receiving direct deposit, the government will then start cutting 10 million checks per week, and then distributing prepaid debit cards, says Pancotti.
“I think this will be much faster than last time, given all the information we know now,” says Pancotti.
How can you find out exactly how much your stimulus payment will be?
Your stimulus payment will be based on your 2019 adjusted gross income. Individuals who earned up to $75,000 will be eligible for the full $600 payment, while those making between $75,000 and $87,000 will receive reduced amounts. Joint filers with income up to $150,000 are eligible for the full payment, while those earning between $150,000 and $174,000 will receive a reduced amount.
The Washington Post reports nearly 85% of American households will receive some stimulus payment, and offers a stimulus calculator to determine exactly how much your payments will be.
Other Benefits and Support
The new relief bill also extends the national eviction moratorium and includes funding for small businesses, food support expansion, and vaccine distribution.
Rental Assistance and Eviction Moratorium
The new package extends the nationwide eviction moratorium until Jan. 31, 2021, and allocates $25 billion for rental relief. This effort is being run through the Treasury Department and is being distributed to states, then local governments who can allocate funds to local housing agencies.
“While extending the CDC eviction moratorium for just one month is insufficient to keep people housed for the duration of the pandemic, the extension provides essential and immediate protection for millions of renters on the verge of losing their homes in January,” said Diane Yentel, the CEO and President of the National Low Income Housing Coalition in a statement Sunday.
The package also allocates an additional $13 million to the supplemental nutrition assistance program (SNAP) — otherwise known as food stamps— increasing maximum benefits through the food assistance program through June 30, 2021.
Help for Businesses
The package includes $284 billion for the Paycheck Protection Program (PPP), giving forgivable loans to small businesses that qualify.
School and child care support
A $10 billion grant is being given to provide child care assistance to families and to help childcare providers cover increased costs from the pandemic.
Vaccine distribution money
$69 million is allocated for vaccine distribution and development.