Your CARES Act and Families First Act Cheat Sheet
COVID-19 has changed many aspects of our day-to-day lives. Among other things, our personal finances, 401(k) accounts, job security, food security, social lives, and family lives have all been impacted.
To mitigate the pandemic’s effect on our personal lives, the U.S. government enacted new laws to help Americans deal with the novel coronavirus.
Passed at the end of March, the Coronavirus Aid, Relief, and Economic Security (CARES) Act and the Families First Coronavirus Response (FFCR) Act made notable changes in how we take care of our health, our work, and our finances. Here are the key impacts both the CARES and FFCR Acts have had on these areas of our lives in 2020.
Health
Particularly in a pandemic, we must look after our physical wellbeing first and foremost. The CARES and FFCR Acts made two significant changes to how we care for ourselves.
Free COVID-related health care
Americans all too often have trouble affording health care and have to choose between their health and other basic needs. With income and job loss due to COVID-19, the government ensured that no one would have to make that choice about the coronavirus.
Since the end of March, group health plans and health insurers are required to cover the cost of COVID-19 health care. Whether you need to be screened using the diagnostic test, treated for symptoms, or given a preventative treatment, it’s free of charge to the patient. This includes a vaccine whenever one is developed.
Expanded paid sick and family medical leave
If you work for a business with fewer than 500 employees, you may be eligible for expanded paid sick and family medical leave. Unfortunately, paid sick and family medical leave under the FFCR Act is not required for healthcare workers or emergency responders.
The FFCR Act provides up to 80 hours of emergency paid sick leave to full-time employees for illness-related absences caused by COVID-19. This includes if you are quarantined, have been advised to self-quarantine, or are experiencing symptoms and are waiting for test results. You also qualify for emergency paid sick leave if you are caring for someone in quarantine or caring for your child because their school or childcare provider is unavailable because of the pandemic.
If you are unable to work because COVID-19 has left you to entertain the kids during the day, you may take up to 12 weeks of emergency family medical leave. Of this, the first 10 days may be unpaid, with 10 weeks paid at up to $200 per day and a total of $10,000. While you are not fully eligible if you have already used 12 weeks of leave for another reason, you could receive an additional two weeks under the FFCR Act.
Work
Sadly, layoffs, furloughs, and closed businesses have become all too common over the past three months. To help provide a safety net to employees and employers, the federal government expanded unemployment benefits and instituted small business relief programs.
Expanded unemployment benefits
The CARES Act broadened eligibility requirements to increase access to unemployment assistance. You are eligible not only if you lose your job, but also if you fall under the following COVID-19 circumstances:
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- You have been furloughed.
- You have been unable to start your new job.
- You are a self-employed, contract, or gig worker.
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After applying and qualifying for unemployment insurance through the Vermont Department of Labor, approved applicants will receive an additional $600 per week from the federal government. This benefit went into effect in Vermont the week ending April 4, 2020 and will continue through the week ending July 25, 2020.
For recipients who exhaust Vermont’s usual 26 weeks of unemployment insurance benefits, the CARES Act extends your benefits for an additional 13 weeks. This extension expires on December 31, 2020.
Increased SNAP benefits
One in four Vermonters suffer from food insecurity in the best of times, and the need for food has only grown during the pandemic. As part of these changes in federal legislation, states received funding to increase access and benefits to the Supplemental Nutrition Assistance Program (SNAP), formerly called the Food Stamp Program and known in Vermont as 3SquaresVT.
To learn more about Vermont’s food assistance program, visit the Vermont Agency of Human Services or dial 2-1-1.
Small business relief
The Small Business Administration’s (SBA) Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) program offer financial assistance to small businesses throughout the country.
The PPP provides forgivable loans to assist business owners retain their employees. Originally set to close on June 30, the deadline for PPP loan applications was extended until August 8, 2020. To date, the program has handed out over 4.8 million approved loans totaling $520 billion. Recipients of PPP funds are able to request forgiveness for qualifying amounts used to sustain business operations.
The SBA expanded its existing EIDL program to make most non-profit organizations eligible. Loans are intended to cover normal operating expenses and other unpaid bills. Recipients can request a $10,000 advance payment on their EIDL loan that does not need to be repaid.
To learn more, visit sba.gov.
Finances
The federal legislation in response to COVID-19 changes how we manage our money in 2020, including our taxes, retirement planning, and student loans.
Taxes
The tax deadline was moved to July 15. Employers received tax credits to cover expanded paid leave under the FFCR Act. But the change you were most likely aware of was the extra $1,200 in your pocket.
Economic Impact Payment
Your economic impact payment, or stimulus check, was technically a tax credit. (In case there is any confusion, no, you don’t have to pay it back, and no, you don’t owe taxes on it.) Stimulus payments started at $1,200 for individuals making $75,000 or less, with an additional $500 per eligible child. You may have received yours by direct deposit, check, or even as a debit card.
Retirement
Because of the coronavirus, normal rules governing retirement accounts were suspended.
Typically, you must withdraw a certain amount from your traditional Individual Retirement Accounts (IRAs) or 401(k) accounts each year after you turn 72 years old. For 2020, those required minimum distributions (RMDs), as they’re known, are suspended. If you’re able, this allows you to earn a little extra interest to fund your retirement.
Not everyone is so secure in planning their financial future, especially amid this period of financial uncertainty. To help individuals who might need more immediate access to funds, the CARES Act lifted restrictions on borrowing against your 401(k) accounts.
Early 401(k) withdrawals, which are usually penalized with a hefty 10% fee, are allowed up to $100,000 without penalty. The maximum loan you can take on your 401(k) was increased from 50% to 100% of your retirement funds, up to $100,000.
If you are unsure how these changes impact your current finances or financial plans, consult a financial advisor.
Student loans
If you’ve been dealing with financial hardship because of COVID-19 and wondering how to pay your student loans, you don’t have to wonder anymore. Student loan payments have been deferred through September 30, 2020. Better yet, the interest on your student loan has been deferred as well, so there’s no penalty for waiting to pay off that debt.
No matter your physical health, employment status, or financial situation, it’s important to know how these significant changes impact you. For a quick summary, download our COVID-19 cheat sheet to understand what the CARES and FFCR Acts mean for you.
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