The last few months have left a lot of people feeling uncertain. Everything from how people normally go about their jobs to how we interact with our families has changed because of the COVID-19 pandemic. We realize that this uncertainty can be scary—we all feel it too—and with the end of some government relief programs coming, it’s our goal to help people stay up-to-date and fully informed about what’s currently going on.
The big thing to know about is the CARES Act, which Congress passed at the start of the pandemic. The intention was to help businesses and people who were struggling—to make it easier on families and laid-off workers who needed most to be able to stay home and flatten the curve.
Just a few months later, millions of Americans are unemployed. As of the beginning of July, unemployment skyrocketed to 17.8 million American workers. These are just a few of the things the CARES Act has provided to help those who were laid off:
- Additional benefits. The CARES Act has provided $600 per week of additional income to unemployment benefits, provided by the federal government. This is scheduled to end by July 31.
- Increased scope. Traditionally, only those who pay into unemployment insurance (primarily W-2 workers) can receive them. The CARES Act temporarily extended benefits to people who don’t usually receive them, like 1099 contractors.
- Extended timeline. The CARES Act lengthened the amount of time a person can receive unemployment benefits.
One of these three things has been making it into the news a lot lately: the $600 unemployment increase.
Why? Look at your calendar. It’s about to end. And, as of the time we’re writing this, there isn’t a clear plan for what comes next.
Some estimate that this will impact more than 25 million Americans, combining those collecting traditional unemployment and the small business owners and 1099 contractors who have been covered by the Pandemic Unemployment Assistance program.
What does this mean if I’m on unemployment?
It means that checks may get a lot smaller in the coming weeks. Unemployment benefits are typically calculated as a percentage of a person’s income. So if you’re making $16 per hour or $640 per week, you’ll receive a portion of that in your unemployment check.
In most states, this comes out to somewhere between $300 and $600, though there are some states with maximum payments outside this range. To put this in perspective, without the CARES Act bonus, most people’s unemployment checks will be 61% lower. In other words, in just a few days most people will be receiving less than half of what they do now.
What comes next?
Technically, the bonus ends on July 31st, which is quickly approaching. However, because of the way states pay unemployment, states will actually stop paying the bonus at the end of this week—the 25th or the 26th, depending on where you live.
There are still some possibilities of an extension, and a few different ideas have been considered. Some have argued to continue the bonus in full, though that looks unlikely. Others have debated whether a smaller dollar amount would work, or even a return-to-work bonus.
The bottom line is that we don’t know what’s coming. There’s a possibility that no further support will come, or that it could be significantly delayed.
What should I do?
There is only so much that all of us can control. But here are a few of our predictions for what’s to come and how you can prepare.
- Get the answers you need. First and foremost, you should be aware of what you’ll be earning without the $600 bonus. This is necessary to understand how much you’ll be impacted.
- Stay on top of the news. Things happen quickly! If additional relief or a back to work bonus is available, you’ll want to know.
- Secure your income. If you’re ready to go back to work and want to ensure that you’ll have the paycheck you need—regardless of what the government decides—we’re here to help. Contact us today.
