On this page you will find information about direct monetary payments and Pandemic Unemployment Assitance.
How does the CARES Act affect my eligibility for unemployment compensation?
CARES establishes a Pandemic Unemployment Assistance program that would allow states to provide unemployment compensation to non-traditional employees - such as gig workers, independent contractors, self-employed individuals, freelancers - and individuals not able to work because of the coronavirus outbreak.
In addition, the bill created Federal Pandemic Unemployment Compensation (FPUC) that will pay unemployed workers $600 a week through July 31, 2020. This compensation will be available to individuals in addition to their regular state or federal unemployment benefits. Notably, receiving FPUC will not restrict a recipient’s eligibility for Medicaid or the Children’s Health Insurance Program.
The CARES Act also provides federal funding for Connecticut to administer its Short-Time Compensation or “work sharing” program, which incentivizes employers to agree to reduce employee hours instead of laying off workers, thereby making employees eligible for partial state unemployment benefits.
States can also provide 13 additional weeks of unemployment benefits to workers who need beyond what is provided for in state and federal law.
The House Committee on Ways & Means provided answers to the following FAQs.
Are self-employed workers and workers in the gig economy eligible for unemployment compensation generally or the Federal Pandemic Unemployment Compensation benefit specifically?
It depends on state law, but self-employed and gig economy workers do not ordinarily have coverage under the unemployment compensation system and so are not eligible for benefits (in part because they do not have employers who contribute to the UC system). However, under the CARES Act, self-employed workers whose states make an agreement with the Department of Labor will receive Pandemic Unemployment Assistance based on their recent earnings and will also be able to receive the $600 a week FPUC supplement on top of that benefit. States will be reimbursed for 100 percent of the cost of administering the benefits, as well as the benefits themselves.
How Much Pandemic Unemployment Assistance (PUA) Would Self-Employed Workers, Individuals About to Start Work, and Others Receive?
The amount would vary by state. All PUA recipients would be eligible for the $600 a week federal supplement. They would also receive a base benefit calculated according to state benefit formulas and using recent information about their wages, but no lower than half the state’s minimum regular UC payment.
What about workers in the performing arts and other industries that were about to start new jobs and had them canceled due to the COVID-19 outbreak?
Workers who had a contract or other offer of employment suspended due to the COVID-19 outbreak would be eligible for Pandemic Unemployment Assistance calculated by their state’s UC program, and also for the $600 a week FPUC supplement.
Will the UC enhancements in the CARES Act make workers whole financially?
Nationally, state UC benefits replace about 40 percent of wages for workers. Under the CARES Act, until July 31, 2020, an average worker who received a state UC benefit and the Federal Pandemic Unemployment Compensation would have 100 percent of their wages replaced, but replacement rates would vary by state and worker.
Why does the CARES Act replace 100 percent of wages for the average worker? Will that discourage people from working?
The COVID-19 pandemic has created a unique, difficult, and unprecedented situation. Normally, the goal of UC benefits is to provide earned benefits to tide workers over while they search for new jobs, and UC does not replace all of the worker’s lost wages, which further strengthens Americans’ natural desire to work and earn wages to support themselves and their families. In this case, public health officials tell us the best thing most Americans can do is to stay home. So in this case, we do not want inadequate wage replacement to force workers, especially those who would normally earn very low UC benefits, to continue searching for jobs or working in violation of public health orders.
Will federal and state workers receive the Federal Pandemic Unemployment Compensation (FPUC)?
Yes, so long as they are eligible for UC as determined by state law.
What about workers who are not laid off, but have their hours reduced?
Individuals who are still working are generally not eligible for UC benefits. However, the CARES Act makes a substantial federal investment in supporting Short-Time Compensation (STC) or “work sharing” programs, which allow employers to make an agreement with the state UC office to reduce hours, instead of laying people off, and then have workers receive partial UC benefits for their lost hours. Individual state policies may vary, but workers with reduced hours who were not part of STC programs would not typically receive UC.
Can workers get UC at the same time as they receive employer-provided paid leave?
No, workers who are receiving paid leave are not eligible for UC.
Can self-employed workers get UC and also claim the refundable tax credit for lost wages in the Families First Coronavirus Response Act?
No, workers who elect to claim the refundable credit would not be eligible for UC for that time period.
What level of benefits will workers get in my state?
UC benefit levels vary widely from state to state. Data on state minimum and maximum UC benefits can be found here and data on average UC benefits can be found here. Additional information on state UC programs can also be found here.
How does the CARES Act help local governments and non-profits which are required to reimburse state UC programs for the full cost of all unemployment benefits provided to their laid off or furloughed workers?
Many non-profit organizations and state and local governments participate in UC using a “reimbursable arrangement.” That means they do not pay the per-worker UC taxes paid by private employers and instead reimburse the state UC office for 100 percent of the cost of benefits paid to workers they furlough or lay off. The CARES Act would provide federal funding to cover half of the cost of reimbursable benefits and provide additional flexibility for those entities to pay the other half over time.
When does the temporary emergency benefit increase end?
The CARES Act terminates the $600 a week FPUC supplement on July 31, 2020, and other provisions on December 31, 2020.
Can workers on UC receive health insurance benefits from their prior employer?
Workers receiving UC are eligible to stay on employer-sponsored insurance through COBRA but will no longer receive employer contributions for the premium. Unlike the House bill, the Senate bill did not provide a subsidy to help workers. Workers who lost their job and were previously covered by employer-sponsored insurance are eligible for a special enrollment period in the ACA marketplace for coverage and may be eligible for advanced premium tax credits and cost-sharing subsidies.
Where Can I Apply?
Payments will provide Americans immediate relief that they can use to assist with rent or mortgage payments, health care or child care costs, or help put food on the table. The IRS will deliver rebates of up to $1,200 for individuals, $2,400 for couples, and $500 per child under age 17.
Who is eligible for a rebate?
Single taxpayers with an adjusted gross income up to $75,000 will receive $1,200 in direct payments, as will joint filers up to $150,000. The benefit gradually decreases until it is eliminated for those making more than $99,000 filing single or $198,000 for those filing jointly.
Social Security recipients, those with no taxable income, as well as those whose incomes are derived entirely from non-taxable programs, are still eligible for this relief as long as they have a Social Security Number. However, people who typically do not file a tax return will need to file a simple tax return to receive an economic impact payment. This includes low-income taxpayers, senior citizens, Social Security recipients, some veterans and individuals with disabilities who are otherwise not required to file a tax return.
The IRS will instruct these taxpayers to file a simple 2019 tax return with information including their filing status, the number of dependents, and direct deposit bank account information on IRS.gov/coronavirus.
Can I still receive a direct payment if I have not filed my tax return for 2018 or 2019?
Yes. The IRS encourages anyone with a tax filing obligation to file a tax return for 2018 or 2019 as soon as possible. Taxpayers should include direct deposit banking information on the return.
When will the IRS distribute rebates?
On March 30, 2020, the Treasury Department and IRS announced that the government would distribute economic payments in the next three weeks
How will I receive my rebate?
When possible, the IRS will send the payment via direct deposit. The IRS will mail out payments otherwise.
The IRS will deposit the economic impact payment directly into the same banking account reflected on a person’s 2019, 2018 tax returns, or - for certain taxpayers - the information listed on their “simple tax return.”
In the coming weeks, the Treasury Department will release a web-based portal for individuals to provide their banking information to the IRS online, so that individuals can receive payments immediately as opposed to checks in the mail.
Will receiving the rebate affect my eligibility for other federal income-targeted programs (i.e. health insurance subsidies)?