Let’s connect!

CARES Act – Unemployment Assistance

Veronique Horne, J.D. and Geoffrey Kayton, CPA

4.10.20 | Client Alert – COVID-19 Update

The CARES Act provides for an estimated $260 billion in enhanced and expanded unemployment compensation to millions of workers who have been laid off, furloughed, or are without work as a direct result of the coronavirus (COVID-19) pandemic. The most impactful benefit that emanated out of the CARES Act is Federal Pandemic Unemployment Compensation which provides for an additional $600 per week to those covered under unemployment compensation, Pandemic Unemployment Assistance, and Pandemic Emergency Unemployment Compensation provisions. The programs specifically created under the CARES Act are federally funded, and states will receive additional funds to administer them.

Pandemic Unemployment Compensation (PUC)

For the period of March 27, 2020 through July 31, 2020 all unemployment benefit claimants will receive their usual calculated benefit, plus an additional $600 per week. PUC may be paid at the same time and in the same manner as any regular compensation otherwise payable for the week involved, or at the option of the state, can be paid separately but must be paid on the same weekly basis as any regular compensation is payable. PUC payments are not considered income for purposes of determining eligibility for Medicaid or the Children’s Health Insurance Program (CHIP), but these payments are subject to income tax in the same manner as regular unemployment compensation.

Pandemic Unemployment Assistance (PUA)

Federal Pandemic Unemployment Assistance (PUA) provides support to those who do not otherwise qualify for unemployment compensation under State or Federal plans, including self-employed individuals and independent contractors, freelancers, individuals seeking part-time work, those without sufficient work history, and those who have exhausted all rights to regular or extended unemployment benefits. The amount of compensation under this section is derived from an existing federal disaster unemployment assistance provision, that provides for 50% of the average weekly payment of regular compensation within the state. PUA is further increased by an additional $600 per week pursuant to the CARES Act.

A maximum of 39 weeks of coverage is available during the period of January 27, 2020 through December 31, 2020, for as long as the covered individual’s unemployment, partial unemployment, or inability to work caused by COVID-19 continues. Any week that an individual receives regular compensation counts toward the 39-week maximum. Covered individuals will be required to self-certify that they are otherwise able and available to work, except that the individual is unemployed, partially unemployed, or unable or unavailable to work because of one or more of circumstances listed below:

  • The individual has been diagnosed with COVID-19, experiencing symptoms of COVID-19, and seeking a medical diagnosis;
  • A member of the individual’s household has been diagnosed with COVID-19;
  • The individual is providing care for a family member or a member of the individual’s household who has been diagnosed with COVID-19;
  • A child or other person in the household for which the individual has primary caregiving responsibility is unable to attend school or another facility that is closed as a direct result of the COVID-19 emergency and such school or facility care is required for the individual to work;
  • The individual is unable to reach the place of employment because of a quarantine imposed as a direct result of the COVID-19 public health emergency;
  • The individual is unable to reach the place of employment because the individual has been advised by a health care provider to self-quarantine due to concerns related to COVID–19;
  • The individual was scheduled to commence employment and does not have a job or is unable to reach the job as a direct result of the COVID-19 public health emergency;
  • The individual has become the breadwinner or major support for a household because the head of the household has died as a direct result of COVID–19;
  • The individual has to quit his or her job as a direct result of COVID–19;
  • The individual’s place of employment is closed as a direct result of the COVID–19 public health emergency; or
  • The individual meets any additional criteria established by the Secretary of the Treasury for unemployment assistance under this section; or
  • The individual is self-employed, is seeking part-time employment, does not have sufficient work history, or otherwise would not qualify for regular unemployment or extended benefits under State or Federal law or the Pandemic Emergency Unemployment Compensation (PEUC) program.

Specifically excluded from coverage are individuals who can telework with pay or an individual who is receiving paid sick leave or other paid leave benefits, regardless of whether they meet any of the criteria prescribed for those covered.

Pandemic Emergency Unemployment Compensation (PEUC)

The Pandemic Emergency Unemployment Compensation (PEUC) program provides for an additional 13 weeks of state unemployment benefits. The additional weeks are triggered after an individual has exhausted all their regular state unemployment compensation for a benefit year or has no right to regular compensation and is actively seeking employment. Most states offer 26 weeks of unemployment benefits (excluding AR, AL, FL, ID, KS, MO, NC & SC). States are provided flexibility when applying the active search for work condition if individuals are unable to search for work because of COVID-19 related illness, quarantine or movement restriction.

Through the CARES Act, the federal government has provided enhanced support for those who usually qualify for unemployment compensation, and support for those who usually do not. The COVID-19 global pandemic is causing a surge in unemployment. As we begin economic recovery, hopefully the foregoing support programs provide some stability.

For more information on this topic or any other matter related to the COVID-19 pandemic, please contact your Berdon advisor.

Berdon LLP New York Accountants