Unemployment and the New Economic Stimulus Package
On March 24, the U.S. Congress passed a historic economic stimulus package - the largest in American history at $2 trillion - in an effort to save the economy, and to provide badly-needed relief to unemployed workers and families.
Currently, unemployment claims in the country have skyrocketed to the highest they have ever been, with a record of 3.28 million applying for unemployment last week. This is nearly five times the previous record high, according to the Washington Post.
The unemployment components of the Coronavirus Aid, Relief, and Economic Stimulus Act (CARES Act) include:
- An extra $600 for unemployed workers per week for four months, on top of their regular state unemployment benefits, which is aimed at boosting unemployment benefits to cover lost wages at 100%.
- More flexible qualification rules to include the self-employed and part-time workers, such as gig workers, independent contractors, and freelancers, who usually do not qualify for benefits. Their benefit amount would be based on previous income and a formula from the Disaster Unemployment Assistance program.
- An additional 13 weeks of benefits for eligible workers, with a maximum total of 39 weeks. The length of benefits coverage varies by state, though most already provide 26 weeks of coverage. However, the extra $600 covers weeks of unemployment for six months.
These new coverage rules last from Jan. 27, 2020 through Dec. 31, 2020. A helpful list of FAQs regarding benefits in specific situations is available from The New York Times.
Economic Stimulus Cash Payout
The stimulus also includes a cash payment for U.S. residents and families. Here is what you can expect:
- A $1,200 ($2,400 for couples) “rebate" payment plus an additional $500 per child for those with adjusted gross income up to $75,000 ($150,000 for married couples).
- For individuals and couples above the income threshold, a phased-out payment would apply, until phasing out completely for: single tax filers earning more than $99,000; head-of-household filers with income over $146,500 with one child; and joint filers with income over $198,000 with no children.
- Income and number of children are determined by recent income tax filings.
- According to the U.S. Treasury Secretary, most people will get their payments within three weeks via electronic payment if the IRS already has your direct deposit information.
Each day, unemployment claims are climbing by tens of thousands, so Congress has acknowledged that another boost to the program may be needed down the road.