With our country's unemployment rate projected to surpass the unemployment rate at the height of the Great Depression, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, passed on March 27, comes as an enormous relief to millions of workers fearing for their financial security during this pandemic-induced recession.
The new law promises an extra $600 per week to workers on unemployment during the COVID-19 pandemic and extends unemployment eligibility by up to 13 weeks. It also dramatically expands who qualifies for unemployment during the crisis. The Act is 880 pages long, so you probably don't have time to read the whole thing. Here are the key details you need to know about how it affects unemployment.
Groups eligible for unemployment during COVID-19
The following groups are eligible for unemployment during the COVID-19 crisis:
- Workers laid off or furloughed due to COVID-19
- Workers who quit due to COVID-19
- Workers caring for children or other dependents at home
- Self-employed workers unable to work due to COVID-19
- Workers who were scheduled to begin employment but cannot due to COVID-19
- Individuals who are now the primary breadwinners because their head of household died from COVID-19
Here are the criteria for each of these groups:
Workers who have been laid off or furloughed
Millions of U.S. workers have already lost their jobs as nonessential businesses are forced to close to comply with social distancing restrictions. While many of these workers have already applied for unemployment benefits, the new law explicitly states their eligibility, just in case there was any question.
The act covers those who are unable to work because they have COVID-19 or are in self-isolation because they believe they may have contracted the disease. Those who are unable to reach their place of employment due to quarantine restrictions and those unable to work due to workplace closures are also eligible for unemployment.
Workers who quit due to COVID-19
Workers who quit their jobs are typically not eligible for unemployment, but workers who quit as a direct result of COVID-19 are eligible for expanded unemployment under the new law. This ensures that workers don't have to choose between their financial security, and their health and safety.
Workers caring for children or other dependents at home
Even if your workplace remains open, you may be eligible for unemployment benefits if you are forced to stay home to care for a family member or other member of your household who has contracted COVID-19.
You can also claim benefits if you must stay home to care for a child who is unable to attend school due to COVID-19 school closures or another member of your household who is unable to attend a facility, like an adult day care center, that has closed due to COVID-19.
Self-employed workers out of work
One of the most surprising unemployment expansions involves the inclusion of self-employed workers, who are usually not eligible for unemployment under any circumstances. Only self-employed workers who are not able to work due to COVID-19 are eligible.
Workers scheduled to begin new employment
Usually, you must have demonstrated a certain level of earnings before you lost your job in order to qualify for unemployment. But the CARES Act enables individuals who were scheduled to begin a job but can no longer do so due to COVID-19 to claim benefits.
Primary breadwinners due to loss of head of household
Individuals who were not working before the pandemic may still be eligible for unemployment if they must become the primary breadwinner because their head of household has died due to COVID-19. This gives these families a reliable stream of income until the crisis passes.
How to apply for unemployment
Visit your state's unemployment website to begin the unemployment application process. These websites are overwhelmed at the moment, so it might take a while to process your application and begin receiving checks. Some states are requesting that workers apply on a specific day based on the first letter of their last name to avoid overwhelming the system.
Have the following information ready when you apply:
- Your Social Security Number or Alien Registration Number
- Your mailing address
- The names, addresses, and phone numbers of all employers you worked for during the last 18 months
- The first and last dates that you worked for each company
Once you submit your application, you will receive a notice in the mail explaining if you qualify, how much you can expect in benefits, and how long you can receive benefits. This varies by state. You must also submit weekly or biweekly benefit claims from your online account to continue receiving checks.
Many states have waived weekly waiting periods to receive benefits and work-search requirements during the pandemic, so you likely don't have to worry about these.
Groups that are not eligible for unemployment during COVID-19
The following groups are not eligible for unemployment during the COVID-19 pandemic:
- Workers who are able to do their jobs remotely
- Workers who are on paid sick or family leave
- Workers who quit their jobs for reasons other than COVID-19
- Individuals with no job or plan to start a job
- Individuals who find new employment
Workers able to telework
If you are able to work from home and you continue to receive a regular paycheck from your employer, you are not eligible for unemployment. But if your workplace closes, either temporarily or permanently due to the crisis, you can apply for unemployment then.
Workers on paid sick or family leave
Workers receiving paid sick or family leave from their employers are also not eligible for unemployment because they're technically still being paid by their employers. But once your paid sick leave or family leave runs out, you are eligible for unemployment if you are not able to return to work.
Workers who quit their job for reasons other than COVID-19
Quitting your job for reasons not directly related to the COVID-19 pandemic -- for example, because you didn't like your job -- does not make you eligible for unemployment. You will have to rely upon other sources, like those discussed below.
Individuals with no jobs or plans to start a job
If you were not working prior to the COVID-19 outbreak and you had no plans to start work in the future, you are not eligible for unemployment unless your head of household dies as discussed above.
Individuals who find new employment
If you find new employment during the COVID-19 pandemic, you must stop claiming unemployment benefits. But if you lose your new employment due to COVID-19 or because the company lets you go through no fault of your own, you may claim unemployment benefits again.
What to do if you don't qualify for unemployment
Individuals who don't qualify for unemployment benefits still have options. The CARES Act includes a plan to send $1,200 stimulus checks to single individuals who make less than $75,000 and $2,400 checks to married couples who make less than $150,000 to help them through this tough time. You may also qualify for an extra $500 for every qualifying child 16 or younger that you are caring for.
You can also rely upon any personal savings that you have or seek out new, temporary employment during the pandemic. Grocery stores, food delivery companies, and cleaning services are hiring large numbers of workers at the moment, as are some online retailers. The federal government is also seeking thousands of workers to assist with the 2020 census.
If you're still struggling to make ends meet, you should talk with your bank, credit card issuers, landlords, and utility companies. Many of these institutions are offering unprecedented levels of hardship assistance to customers affected by COVID-19. They may enable you to defer some payments, which can free up more cash in your budget.
The CARES Act expands unemployment dramatically during this crisis, and if you qualify, it's something you should definitely look into. If you don't qualify for unemployment benefits at present, try some of the other tips listed above and apply for unemployment if you become eligible in the future.