April 10, 2020

Aid to Families and Workers in Coronavirus Response


KEY TAKEAWAYS

  • Congress has passed three laws supporting families and workers as they deal with the effects of the coronavirus.
  • Congress is requiring certain employers to give paid sick and expanded family leave to employees unable to work for coronavirus-related reasons. It has expanded jobless benefits, including for the self-employed and others who do not qualify for regular unemployment benefits.
  • The federal government is also giving Americans direct cash aid through economic impact payments, to help them meet immediate obligations and increase their economic security. 

Congress has passed three separate pieces of legislation to help the country respond to the coronavirus outbreak. The laws include support for workers and families, including through emergency paid sick days, job-protected paid family leave, direct cash assistance, and tax relief.

Coronavirus Response Resources for Families and Workers Provided by Congress

Families and Workers Resources

Phase I: Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020

Access to Telehealth Services. The law ensures that Medicare enrollees can access health care services from their home, rather than risk contracting the virus when leaving home to seek medical care. It allows the Centers for Medicare and Medicaid Services to waive certain Medicare program requirements, thereby expanding seniors’ access to telehealth care.

Phase II: Families First Coronavirus Response Act

Nutrition Programs. The Phase II legislation provides food aid for children and families. This includes: $250 million for nutrition programs for seniors; $500 million for the special supplemental nutrition program for women infants and children; and $400 million for the emergency food assistance program, which helps states and food banks distribute food for low-income people through local agencies. The law also includes several temporary flexibilities, waivers, and benefits changes during this pandemic emergency period. It allows for temporary Supplemental Nutrition Assistance Program benefits in place of “free” or “reduced-price” school meals for families with eligible children whose schools close for at least five days in a row because of the virus emergency. It also allows for certain waivers, including one that allows closed schools, child and adult food program centers, and other eligible nonprofit sponsors to serve and distribute food in ways that do not require people to eat together. It allows states to temporarily increase and provide emergency SNAP benefit allotments and provides administrative flexibilities to process and renew both SNAP and WIC applications. States can access these options by submitting plans and waivers to the Agriculture Department. The department has taken actions to process, provide technical assistance where needed, and implement the law’s nutrition provisions.

Emergency Paid Sick and Expanded Family and Medical Leave. The FFCRA requires certain government employers and businesses with fewer than 500 employees to provide paid sick leave and paid family and medical leave related to the coronavirus emergency. Businesses with fewer than 50 employees can seek an exemption. The law pairs these paid leave requirements with refundable payroll tax credits to cover the costs to employers. It sets up similar sick leave and family leave tax credits for self-employed workers. Full-time workers receive 80 hours of paid sick leave, and part-time workers receive time equal to the average number of hours they work in a given two-week period. Employees who are quarantined under a government order or the advice of a health care provider, or who are experiencing coronavirus symptoms and seeking a medical diagnosis, are eligible for pay of up to $511 per day, and $5,110 total. For those caring for someone in quarantine or for a child whose school has closed, pay is up to $200 per day and $2,000 total.

Workers also are entitled to up to 12 weeks of family and medical leave to care for a child whose school or daycare facility closed because of the coronavirus. They must have worked for the employer for at least 30 days. The first 10 days may be unpaid but generally would be covered by the emergency sick leave requirement, or the employee could use vacation leave or other eligible paid leave for these days. For the rest of the leave, the employee would be entitled to two-thirds of regular pay, up to $200 per day and $10,000 total.

The Labor Department has issued a rule, fact sheets, and FAQs about the paid leave provisions. Internal Revenue Service has issued information on the payroll tax credits.

Unemployment Insurance. The law provides $1 billion emergency administration grants to help states with the costs of administering their unemployment insurance programs. The states will receive half of their funding within 60 days, after they satisfy conditions such as requiring employers to tell employees about UI benefits when they separate and letting people apply remotely. States that have at least a 10% increase in unemployment claims will receive the rest of the funds. The law gives states authority to make changes to their regular UI practices due to the virus, such as waiving job search requirements and the waiting period before people can start receiving benefits. DOL has issued instructions, including states’ shares of the emergency administration grants.

Phase III: Coronavirus Aid, Relief, and Economic Security Act

Expanded Unemployment Insurance. The Phase III legislation, the CARES Act, builds on the Phase II law’s unemployment provisions. It creates a Pandemic Unemployment Assistance program to provide up to 39 weeks of jobless benefits for the self-employed, independent contractors, and other workers who are unable to work because of the virus but do not qualify for regular unemployment compensation. It lasts until December 31. The law also provides a federally funded emergency increase in unemployment compensation benefits of $600 per week, for up to four months, for people receiving regular UI and the new Pandemic Unemployment Assistance. This amount is in addition to the weekly benefit they receive from their state. Through December 31, the law also provides an additional 13 weeks of jobless benefits for people who remain unemployed but have exhausted their state benefits.

DOL issued instructions for states on the emergency benefit increase of $600 per week provided under the Federal Pandemic Unemployment Compensation program. It also has issued guidance to states on the Pandemic Unemployment Assistance Program.

Paid Leave for Rehired Employees. The CARES Act builds on the paid leave provisions in the FFCRA by permitting employees let go on or after March 1, but later rehired, to be eligible for paid family and medical leave under certain circumstances.

Economic Impact Payments. The law provides direct cash assistance to help American workers and families meet their short-term needs. These economic impact payments will total $1,200 for most adults who have up to $75,000 in adjusted gross income (or AGI of $112,500 for heads of household and $150,000 for married couples filing jointly). An additional $500 is provided for each child. The check amount is reduced by $5 for each $100 of income that a taxpayer has above these thresholds. The payment phases out fully for people with incomes above $99,000 (or $146,500 for heads of household with one child, and $198,000 for joint filers with no children). To be eligible to receive the payment, people must have a work-eligible Social Security number and not be a dependent of another taxpayer. People with no income, or who receive income solely through non-taxable, means-tested benefit programs are also eligible. The IRS has published initial information on the payments. The agency has said it will be able to use information from Social Security Administration and Railroad Retirement Board 1099 forms to process payments for those who typically do not have to file tax returns.

Waiver for Required Minimum Distributions. The law offers relief by waiving required minimum distributions from IRAs, 401(k)s, and other defined contribution retirement plans during 2020.

Special Rules for Retirement Funds. The law helps Americans by waiving the normal 10% penalty for early withdrawals from qualified retirement accounts and allowing them to make coronavirus-related distributions. For 2020, up to $100,000 may be withdrawn. A person with the virus or whose spouse or dependent has the virus, or someone suffering financially from being laid off or furloughed, are among those eligible to take these distributions. People will pay taxes on the income from these distributions over three years. They also may put the money they took out back into their retirement accounts within three years, even if they have exceeded a given year’s contribution limit. The law also increases the limits on loans from retirement plans from $50,000 to $100,000 and permits people with existing loans to delay repayment for up to a year.

Charitable Giving. The CARES Act encourages people to donate to charities by allowing them to deduct up to $300 of cash contributions on their taxes even if they do not itemize. The new law also suspends the limit on charitable deductions for cash contributions by people who itemize.

Student Loan Relief. The law provides substantial relief to students by deferring student loan payments, principal, and interest for all borrowers of federally owned loans through September 30. Students who drop out of school because of the pandemic will not be required to return portions of their Pell Grants or federal loans. Students who have to drop out also will not have the current academic term counted toward their lifetime eligibility limit for Pell Grants or subsidized federal loans. The law allows this partial school year to count as a full year of service for teachers seeking to meet requirements under the Teacher Loan Forgiveness program and the TEACH Grant program.

The law also expands a tuition-related employee benefit by allowing employers to make student loan payments – up to $5,250 – on a tax-free basis to the employee.

Homeowner Protections. The law includes protections for homeowners with federally backed mortgages, including mortgages purchased by Fannie Mae and Freddie Mac, insured by the departments of Housing and Urban Development, Veterans Affairs, or Agriculture, or made directly by USDA. It prohibits foreclosures on these federally backed mortgages for 60 days starting March 18 and provides up to one year of forbearance for borrowers of these mortgages who are facing financial hardship from the coronavirus.

Coronavirus Relief Fund. Title V of the CARES Act provides $150 billion for a new Coronavirus Relief Fund that the Treasury Department will oversee. This fund is intended to help states, territories, and tribal governments cover coronavirus response costs they incur from March 1 to December 30 that they did not account for in their most recently approved budget. Of the total, $3 billion is reserved for the District of Columbia and the U.S. territories, and $8 billion is reserved for tribal governments. The other $139 billion will be allocated among states by population, with each state receiving a minimum of $1.25 billion. Local governments with populations greater than 500,000 may apply directly to Treasury for funds.

Nutrition Program funding. The law provides approximately $25 billion for additional flexibilities, benefit allotments, and usage of SNAP and other flexibilities. This includes $8.8 billion for child nutrition; $15.5 billion for SNAP; $450 million for the emergency food assistance program; $100 million for food distribution on Indian reservations; and $200 million in nutrition assistance grants for Puerto Rico, Northern Marianna Islands, and American Samoa.

 

Issue Tags: COVID-19, Taxes, Labor, Housing, Economy