How affected workers can maximize the benefits of unemployment insurance

With economists predicting that nearly 20 million people will be laid off or furloughed by July amidst the global COVID-19 pandemic, many American workers will be looking to get as much out of their unemployment benefits as they can.

The good news for workers is that they have access to more unemployment benefits than usual. Under its $2 trillion stimulus plan, the federal government has made $260 billion available to enhance and expand unemployment insurance benefits for those affected by the novel coronavirus. The plan, known as the Coronavirus Aid, Relief and Economic Security (CARES) Act, was signed into law March 27.

Here’s what workers need to know so they can make the most of the new unemployment benefits.

Who is eligible?

If a worker can cite COVID-19 as the reason why a job or income was lost, odds are that individuals will qualify for the new beefed-up unemployment benefits.

Under traditional unemployment insurance rules, workers qualify for benefits if they have lost a job through no fault of their own. Through the Pandemic Emergency Unemployment Compensation program, one of three unemployment initiatives in the CARES Act, the federal government is extending unemployment benefits to the following workers who have lost income for reasons related to COVID-19:

• Gig workers such as ride-share drivers;
• Independent contractors;
• Freelancers;
• Part-time workers; and
• Self-employed individuals with a limited liability or S corporation.

Workers who have lost income because of coronavirus can qualify as long as they align with any of these circumstances:

• Permanent or temporary layoff;
• Reduced hours;
• Self-employed with lost income;
• Under quarantine and unable to work;
• Cannot work because of a risk of exposure; or
• Unable to work while caring for a family member with coronavirus.

Under the law, workers do not have to quit their jobs to receive benefits.

The new benefits exclude:

• Workers who are receiving paid sick or family leave from their employer; and
• Individuals who are able to work from home with pay.

How long will benefits last, and what do they cover?

Under traditional unemployment insurance, the average benefit payout in the U.S. is $385 per week, but the amount and duration of benefits vary by state. In many states, traditional payouts come out to about half of a worker’s salary for 26 weeks.

Through the plan’s Federal Pandemic Unemployment Compensation program, laid-off and furloughed individuals who file for state unemployment insurance will receive an extra $600 per week, in addition to whatever amount the state currently provides, until July 31, 2020. Depending on the state, the $600 weekly benefit could be retroactive back to March 28.

The new federal law also provides an extra 13 weeks of benefits for people who are still unemployed after their state benefit period runs out. This extension is part of the plan’s Pandemic Emergency Unemployment Compensation program.

How do emergency relief efforts come into play?

The stimulus-driven unemployment benefits are available in addition to other forms of federal relief that have recently become available. Depending on their taxable household income, most families would receive $1,200 per adult and $500 per child under 17 under the federal relief package.

Self-employed workers and independent contractors who apply for unemployment benefits can also obtain two types of SBA assistance, backed by the stimulus. The SBA’s Economic Injury Disaster Loan Program includes a $10,000 emergency grant for businesses and nonprofits, as well as low-interest loans to cover operating expenses. And the SBA’s Paycheck Protection Program provides small businesses with a forgivable loan to cover up to eight weeks of payroll costs and interest on mortgages, rent and utilities.

How do you apply for unemployment?

Workers can find out how to file in their state by searching the U.S. Department of Labor’s Unemployment Benefits Finder. Most states recommend that workers file their unemployment claims online, but workers may also file in person or by phone.

Workers should file for benefits in the state where they worked. If the employee worked in more than one state, then that person should contact the unemployment office for the state where they live.

Application requirements may include:

• Social Security number
• Driver’s license number
• Reason for leaving
• First and last day worked
• Name, address and phone number of employer
• Mailing address
• Phone number and email address
• Bank name, account and routing numbers

How long will it take?

Nearly 10 million Americans filed unemployment claims in the last two weeks of March alone. Because of this influx, unemployment systems are overloaded, with extremely high call volumes, wait times and website traffic. Workers may need to try filing claims at different times of the day, and it may take several attempts.

Many states are still figuring out how to implement some of the new benefits. So it could take awhile for relaxed requirements and increased payouts to start showing up. At least 35 states have waived the one-week waiting period that most states impose for workers to collect unemployment benefits.

Some states are reporting that they could start issuing the additional $600 weekly unemployment payments as early as mid-April. So the money is coming. And Americans who follow the guidelines should start seeing some substantial relief.

Autumn Cafiero Giusti is a New Orleans-based writer and business journalist who covers insurance and personal finance. She also is a frequent contributor to InsuranceQuotes.com, which publishes in-depth studies, data and analysis related to auto, home, health, life and business insurance. Based in New Orleans, Autumn is a veteran journalist who specializes in insurance and personal finance. She can be reached at autumn@autumngiusti.com.

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