What relief can I expect now that Congress has passed the CARES Act?

The Coronavirus Aid, Relief, and Economic Security Act or CARES Act, passed by Congress and signed by the president last week provides emergency relief in a variety of forms. What follows is not intended to be a comprehensive list but rather a general overview of the types of relief made available by the Act most likely to benefit our users. 

Stimulus funds for individuals

Individuals earning less than $75,000 per year will receive a one time payment of $1,200 and couples making less than $150,000 per year will receive a total of $2,400. The Act provides an additional $500 per child for eligible individuals. If you haven’t received your stimulus check and you’re getting ready to file your case, be sure to check out this information.

If you receive SSI and have qualifying children under the age of 17, check out this guidance based on instructions published by the Social Security Administration.

Increased Unemployment Benefits

The federal government will increase unemployment benefits for every eligible individual by $600/week for up to 4 months. This is in addition to what states pay to eligible individuals. The CARES Act also adds 13 weeks of unemployment insurance to assist those who are nearing the maximum number of weeks of unemployment insurance in their state.

Unemployment benefits for gig workers and independent contractor

Folks who are self-employed, gig workers, freelancers, or other independent contractors are typically not eligible for unemployment insurance. The Act created the Pandemic Unemployment Assistance program to help them through the end of the year if they lose work as a direct result of the public health emergency.

Paycheck Protection Program for small businesses

Recognizing the impact the pandemic and economic downturn have on small businesses, the CARES Act allocated $350 billion to help small business owners keep their employees. Under the Paycheck Protection Program, small businesses can apply for federally guaranteed loans without having to worry about signing a personal guarantee or offering up collateral for the loan. Importantly, if the borrower is able to avoid laying off employees or significantly reducing wages, the loan is forgiven. For more details on this program, check out this guidance from the U.S. Chamber of Commerce. This is in addition to the emergency grants of up to $10,000 to provide emergency funds to small business owners. 

Miscellaneous Provisions

• The deadline to file your 2019 tax return has been extended to July 15, 2020. 

• All private insurance plans have to cover both the treatment of COVID-19 and the eventual vaccine. 

• Employers can contribute up to $5,250 towards the repayment of employees’ student loans. This amount will not be taxed as income to the employee

There is, of course, much more to this relief bill, including provisions and funding to extend existing social safety net programs including SNAP, child nutrition assistance through schools, and food banks. You can find all of our content related to the COVID-19 outbreak and its effects on the bankruptcy process here.