Last week Congress provided relief for Americans, businesses, and healthcare institutions through a record stimulus deal in response to the COVID-19 pandemic, The Coronavirus Aid, Relief, and Economic Security Act (CARES).  The Senate passed H.R. 748 Wednesday March 25, 2020, later approved by the House on Friday March 27, 2020, and ultimately signed by the President on March 27, 2020.

Congress provided generous provisions found within Title II, Subtitle A.  This legislation is known as the “Relief for Workers Affected by Coronavirus Act.”  It provides for substantial unemployment compensation for the unemployed, under-employed, and self-employed, among others. Additional installments will address the other major components of The Coronavirus Aid, Relief, and Economic Security Act (CARES).  You may access the full text of the law at the following link: https://www.congress.gov/bill/116th-congress/house-bill/748/text/enr?q=%7B%22search%22%3A%5B%22hr748%22%5D%7D&r=1

Eligibility

Aid is available for covered individuals who are not eligible for regular compensation or standard state unemployment compensation benefits.  The definition of a covered individual is quite broad and describes many situations in which the individual could request aid.  Essentially, if the worker is affected by COVID-19 in any way, the individual is a covered individual for these purposes.  It’s important to emphasize that this law includes the self-employed as covered individuals.  The only specific exclusions identified in the law are those who can telework with pay and those receiving paid sick leave or paid family leave.

Amount of Assistance – Employed Individuals

The amount of assistance allowed in this bill is the amount that the state unemployment commission would calculate, plus $600 per week.  This additional amount is considered, “Federal Pandemic Unemployment Compensation.”  In the state of Texas, the maximum amount of assistance that can be requested is $465 per week.  With the added pandemic payment, the maximum payment will be $1065 per week.

Amount of Assistance – Self-Employed Individuals

The amount of assistance to self-employed individuals will be equal to one-quarter of the state’s average weekly benefit amount, plus $600.  The House of Representatives Ways and Means Committee estimates this to be approximately $675 a week on average.  Contact your state unemployment commission for further information and for a calculation that applies to your situation. 

Time Periods, Duration, Waiting Period

The Act states that relief can be made available for weeks of unemployment, partial unemployment or inability to work including the dates January 27, 2020 through December 31, 2020 as long as the reason for the inability to work continues to be related to COVID-19.  The duration of the assistance is an additional 13 weeks.  This is in addition to what the state typically covers.  Most states cover up to 26 weeks.  The maximum coverage under this law is 39 weeks, subject to certain limitations.  Additionally, the Act dictates no waiting period for this assistance.

Coordination with Other Benefits

If an individual is already receiving unemployment benefits, this new law provides the additional $600 per week pandemic payment to be paid out for four months.

Other Considerations

There are other special considerations for those individuals who were about to start work, job entrants, nonprofits, tribal organizations, and local governments. 

It’s important to note that considering the pay history, certain individuals might be paid more than their regular compensation under this provision.  There is risk that employees will not be incentivized into returning to work until the benefit period is exhausted.

Next Steps

If you believe you qualify for the new federal unemployment benefits, visit your state’s unemployment commission for additional information on how to apply.

As your trusted advisors, we are committed to keeping you well-informed with any new legislation passed by Congress as well as any new pronouncements by the Department of Treasury that may affect you. Please do not hesitate to reach out to KHA with any additional questions you may have.  

These sources are simply included for informational purposes. KHA Accountants, PLLC, its partners and others do not provide any assurance as to the accuracy of these items or the information included therein. As such, KHA Accountants, PLLC cannot be held liable for any information derived from referenced sources. This is intended for illustrative and discussion purposes only.