Most CARES Act Benefits Are Ending on Dec. 31st. Are You Prepared?
About the author: Lamar Watson, CFP®, is a Fee-Only Financial Advisor in the Washington, D.C. area, that works with clients virtually across the country. Lamar's work with his clients focuses on budgeting, employee benefits, paying down debt, buying their first home, and investing. Lamar is the Founder of Dream Financial Planning, a virtual financial planning firm specifically designed to help young professionals and minorities take control of their finances and fulfill their dreams. Feel free to schedule a complimentary consultation to learn how we use The DREAM Financial Planning Process ™ to help our clients achieve their goals.
The CARES Act was passed on March 27, 2020 amidst the onset of COVID-19 in America. The package included over $2 trillion in economic relief for businesses, workers, families and governments.1
Now, the year is almost over - and some benefits included in the CARES Act are expiring. Many Americans have relied on these benefits to make ends meet throughout the course of the pandemic, and there’s widespread uncertainty about benefits coming in the future.
Which Benefits Are Expiring on Dec. 31?
Benefit #1: Pandemic Unemployment Assistance
The Pandemic Unemployment Assistance program, or PUA, gives states the ability to provide “unemployment” benefits to those who don’t qualify for regular unemployment. This includes individuals that are self-employed, independent contractors or gig economy workers.2
Benefit #2: Extended Federal Unemployment Benefits
The CARES Act also enhanced regular unemployment benefits. Thanks to Pandemic Emergency Unemployment Compensation, individuals have been able to collect federal unemployment benefits for up to 39 weeks rather than the standard 26.3
Benefit #3: $300 Extra Unemployment Benefit
Although it was valued at $600 for the first few months of the pandemic, individuals collecting unemployment benefits have been receiving a $300 bonus unemployment check weekly.
Benefit #4: Protections Against Evictions
Extended by the CDC through Dec. 31, there are currently protections against evictions for failure to pay rent in order to prevent the spread of COVID-19. This prevents a landlord or owner from evicting a “covered” person from a residential property due to the tenant’s inability to pay rent.4
Benefit #5: Student Loan Deferments
Another extended portion of the CARES Act, this stipulation allowed those with student loans to defer payments until January 31st. Unless further action is taken, these deferments may no longer be an option and interest will resume being charged.5
What Can You Do?
If you’ve been depending on many of these benefits financially, the end of the year seems daunting. It’s difficult to say if benefits will be extended or new benefits introduced. Assuming these benefits are ending permanently for the time being, here are some measures you can take to prepare.
Make a Plan
It sounds simple, but this is the most important task. Talk to your family and loved ones and make a plan to conserve your finances. Maybe this means you have to cut your spending, alter how you’re allocating your company’s budget or temporarily move in with family - whatever your plan of action may be, just make sure you have one.
Keep an Eye On Policies
This may not be the end of your benefits. Always stay aware of what’s going on in policy, on both the state and federal levels, so you can remain on top of the situation.
This has been important throughout the entire pandemic. In such uncertain times, many people are needing to get creative in order to preserve financial security. Perhaps you need to adapt your business to a remote environment or set a budget for your family members. Be flexible and patient, and encourage the same from others.
The state of the economy, and particularly the policies instated in response, have instilled uncertainty nationwide. If you’re depending on CARES Act Benefits, don’t get caught off guard when they expire. Get informed about the situation, understand how it affects you and make a plan as we go into the new year.
Dream Financial Planning Process ™
Whether you're managing student loan debt, starting a business, or considering buying your first home, the DREAM Financial Planning Process™ is tailored to the unique needs of busy professionals in their 30s and 40s. This process focuses more on short-term goals while you grow and evolve in your personal and professional life. If you're looking for guidance on Financial Planning, optimizing employee benefits, budgeting, student loans, and managing your 401k or investments we can help.
With uncertainty surrounding the economic stability of our country, it's okay to have fears and anxieties surrounding your own savings and investments. The most productive course of action from here is to reach out to Dream Financial Planning (or whoever your trusted advisor might be) and discuss your options. It's easy to have knee-jerk reactions when it feels like the bottom is falling out, but it is imperative to make decisions using research-backed data and a level head. If you'd like a Complimentary Review and risk assessment of your investment portfolio feel free to send me an e-mail.
On the first Thursday of every month I send out a monthly newsletter with tips and tricks to help you manage your finances. The December Newsletter is filled with information about Employee Stock Options, Budgeting Resolutions, and Tips to Maintain a Work-Life Balance.
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