Enhanced Unemployment Benefits for Workers Under CARES Act

March 31, 2020
Senior Wealth Planner Karin Prangley breaks down how the CARES Act enhances unemployment benefits across the U.S. to provide more relief to more categories of people.

The recently enacted Coronavirus Aid, Relief, and Economic Security Act (CARES Act) includes several enhancements to existing unemployment benefits to aid the millions of Americans who have been laid off, unable to work if self-employed or remain unemployed as a result of the COVID-19 outbreak.

While unemployment programs vary by state, the act increases and expands minimum unemployment assistance in every state through December 31, 2020, in several important ways.

Who Can Get Unemployment Benefits

Americans generally are eligible for unemployment benefits if they are laid off from work and are unable to immediately find replacement work. The CARES Act expands the definition of eligibility for employment benefits and expands benefits to cover not just those laid off as a result of COVID-19, but also those who are:

  • Self-employed
  • Independent contractors
  • Part-time employment seekers
  • Task workers, such as Uber drivers
  • Without sufficient work history or who have already exhausted their unemployment benefits

Applicants must be able to self-certify that they are unemployed, partially unemployed or unable or unavailable to work due to one of the following reasons:

  • They or a member of their household has been diagnosed with COVID-19.
  • They have the primary caregiving responsibility for someone unable to attend school or another facility as a result of the COVID-19 outbreak.
  • They are quarantined (or have been told to self-quarantine).
  • They were scheduled, but are unable, to start a job because of the COVID-19 outbreak.
  • They have become the de facto primary breadwinner of their household because the previous breadwinner died from COVID-19.
  • They quit their job as a result of the COVID-19 outbreak.

Those receiving paid leave or who are able to telework are not eligible for unemployment assistance.

The CARES Act also provides funding for states to pay unemployment benefits to employees whose hours have been reduced but who remain employed. It is likely that most states will use this funding to quickly implement an unemployment benefits program to employees whose hours have been reduced.

Enhanced Amount of Benefits

Current state unemployment benefits vary from $200 to $550 per week. Congress’ intent in the CARES Act is to get employees closer to the pay they would be earning had they not been laid off. The act provides that unemployment compensation for eligible individuals will be the sum of whatever benefit the applicant’s state would have already provided plus $600 per week. The extra $600 per week is available to those who now qualify based on the expanded unemployment guidelines noted as well as those who already qualify under existing guidelines. Unemployment compensation has also been extended by 13 weeks beyond what is already provided under state law for up to 39 weeks of total benefits. For example, New York State currently provides a maximum of 26 weeks of unemployment benefits. With the extra 13 weeks provided under the act, those eligible for unemployment benefits in New York may receive up to 39 weeks of unemployment compensation.

Streamlined Application Process

The CARES Act provides that states will be fully reimbursed for providing benefits from day one of unemployment, encouraging states to remove a common one-week waiting period for unemployment benefits. The act provides substantial incentives for states to streamline their unemployment programs. While there has been much demand for these programs, with long wait times and computer errors, most states have announced they are increasing staffing to respond to demand. Most states allow applicants to apply for unemployment benefits over the phone or online, and benefits will then be sent via direct deposit or a mailed debit card.

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