PROVIDENCE, RI – As jobless claims soar in Rhode Island and nationwide due to the novel coronavirus (COVID-19) outbreak, U.S. Senator Jack Reed says the new coronavirus economic stabilization law provides about $300 billion for cash payments and $260 billion for enhanced unemployment assistance and expands benefits so jobless Americans receive an extra $600 a week for up to four months in an attempt to replace 100 percent of wages for the average worker. The law also provides $100 million through Reed’s short-time compensation (STC) provision, which is a layoff prevention program for businesses and workers known as work sharing. It also includes help for small businesses and employee retention payroll tax credits to keep more people on the job earning a steady paycheck.
So what does this mean for Rhode Islanders? Who qualifies? How much do they get? When will they get it? And is an application required?
For starters, the law provides direct payments of $1,200 for individuals earning up to $75,000 and $2,400 for couples earning up to $150,000. Above those thresholds, the payments start to phase out, with rebates declining $5 for every $100 above the annual $75,000/$150,000 income ceiling, and are capped for individuals making above $99,000 a year and married couples who make over $198,000. The Trump Administration says it will have the funds out the door within three weeks. The payments will likely be directly deposited. No application is required except for a few rare situations. For those who don’t usually file tax returns, the IRS should request that information from the Social Security Administration or U.S. Department of Veterans Affairs.
“Times are tough and these are targeted, temporary benefits to help people make ends meet and stabilize our economy,” said Senator Reed, who was on the bipartisan taskforce that negotiated provisions of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. “This federal funding will push hundreds of millions into Rhode Island’s economy at a time when it is critically needed to help families, businesses, and communities stay afloat and weather the storm. The economic relief goes hand in hand with protecting public health and will help mitigate community spread of coronavirus. I’m pressing the Trump Administration to get these funds and other assistance out to people as soon as possible. Secretary Mnuchin told us it should take about three weeks for people to start seeing payments.”
For FAQs on Direct Payments, please see FAQ section at bottom of this release.
Senator Reed backed language in the bill to ensure taxpayers with dependent children, regardless of income level, will receive a $500 payment for each child under 17 years of age.
For Rhode Islanders who find themselves suddenly jobless, the new federal law means they will receive $600 a week on top of the money they would usually get from the existing unemployment program.
The U.S. Department of Labor reports that 3.28 million people filed for unemployment insurance last week, including 35,436 Rhode Islanders. According to the Rhode Island Department of Labor and Training (RIDLT), over 61,000 Rhode Islanders have filed for unemployment benefits since March 9, the vast majority citing COVID-19 as the reason they lost their job.
Senator Reed is encouraging all Rhode Islanders who have been laid off to apply for unemployment assistance.
The federal-state unemployment insurance (UI) system is designed to help people who have lost their jobs by temporarily replacing part of their wages. Reed notes that the new pandemic unemployment programs will cover self-employed individuals, freelancers, and independent contractors in addition to employees. And the benefits have been extended from 26 weeks in Rhode Island to 39 weeks, retroactive to January 27, 2020 and ending on December 31, 2020.
Usually, there is a one-week waiting period to begin collecting unemployment. But the CARES Act incentivized states to waive that waiting period and will fully reimburse Rhode Island for being an early adapter by compensating the state and fully covering unemployment compensation to individuals for their first week of regular unemployment.
“My goal in this legislation was to take care of people. We put workers first, including those who find themselves unemployed due to COVID-19. This law ensures most of those folks will receive, on average, their full pay for four months. Hopefully, by that time we’ll have a better handle on COVID-19. But right now, times are historically tough, and we’ve got to help people. I’m doing outreach to ensure that every person who is eligible gets the help they need and that Rhode Island gets the maximum economic and public health benefit. I will continue working non-stop to keep families afloat, help businesses survive, and stabilize the economy as we steer through this pandemic,” said Reed.
LAYOFF PREVENTION – WORK SHARE
And in an effort to help employers avoid terminating or furloughing skilled-workers and incur the costs of rehiring, and to help workers keep their jobs and benefits, Senator Reed added a $100 million work share provision to the CARES Act.
Rhode Island is one of 28 states and the District of Columbia that currently offer work sharing programs, also referred to as short-time compensation (STC). Work sharing is a voluntary program that preserves jobs by giving employers an alternative to layoffs during times of decreased demand. It provides struggling companies the flexibility to reduce hours instead of their workforce and helps employers save money on rehiring costs, while employees who participate in work sharing keep their jobs and receive a portion of unemployment insurance benefits to make up for lost wages. This provision is modeled after Reed’s Layoff Prevention Act, which Congress previously enacted from 2012 to 2015, saving over 130,000 jobs at the time. Administered at the state level and reimbursed by the federal government, nearly 30 states have already used some form of work sharing program to help businesses and workers in their communities. The bill includes 100 percent federal funding of work share programs for states with programs already in place, and 50 percent federal funding of work share programs for states that work with the U.S. Department of Labor to develop a new work-share plan.
Rhode Island’s WorkShare program is available to any employer with two or more employees. Interested employers may apply for WorkShare by visiting DLT’s WorkShare website or calling their employer phone line at (401) 462-8418.
“Work sharing is a critical tool in an economic downturn that allows companies to reduce work hours for their staff but keep them on full payroll, and maintain their health and retirement benefits. So workers win and companies save on re-hiring costs. It is a proven job saver in both red states and blue states and this $100 million will benefit Rhode Island and other states with existing work sharing programs, and help those that are looking to enact a program qualify for federal support,” said Senator Reed.
FAQ – DIRECT PAYMENTS
DO I QUALIFY FOR A DIRECT PAYMENT?
Everyone with a valid Social Security number qualifies for a rebate direct-deposit or check, including those on Social Security, SSDI, VA benefits, or other means tested federal benefits as long as they make under $75,000 as an individual or $150,000 as a couple (A modest amount will be sent for those above these thresholds for incomes above $99,000 for an individual, $146,500 for an individual with one child, and $198,000 for a couple with no children).
DO I GET A CHECK OR DIRECT-DEPOSIT?
Most Americans should get direct-deposit, but the Administration has not announced its plan.
DO I GET THIS MONEY IF I BENEFIT FROM THE NEW UNEMPLOYMENT PROGRAM OR ITS SMALL BUSINESS LOAN PROGRAM?
Yes, as long as you meet the other guidelines on income and having a valid Social Security number.
DO I NEED TO DO ANYTHING?
Most Americans will not need to apply for the check as long as you filed taxes for 2018 or 2019.
If you did not file taxes for 2018 or 2019, the hope is the IRS will coordinate with other federal agencies like the VA and Social Security to verify that you should receive a check.
WHAT DO I GET IF I MEET THE RULES?
The direct-deposit or check is:
• $1,200 for individuals making up to $75,000,
• $2,400 for couples up to $150,000,
• and $500 per child under the age of 17.
DO I HAVE TO PAY TAXES ON THEM?
These checks are not subject to federal income tax.
- FAQ – UNEMPLOYMENT
WHEN & HOW DO I APPLY FOR UNEMPLOYMENT?
Rhode Islanders can apply for unemployment insurance (UI), temporary disability insurance (TDI), or temporary caregiver insurance (TCI) benefits online: http://www.dlt.ri.gov/fileclaim.htm
RIDLT recommends filing an unemployment claim within 7 days of your last day of employment to avoid jeopardizing or delaying your first payment.
HOW MUCH ARE THE NEW UI BENEFITS WORTH?
It depends on how much you previously earned. UI covers a percentage of an unemployed individual’s previous salary. Under the CARES Act, the federal government will provide an extra $600 per week to eligible individuals to complement existing state unemployment benefits. The goal is to ensure people are receiving closer to 100 percent of what they were making before the COVID-19 pandemic hit.
HOW LONG WILL THESE BENEFITS LAST?
Different benefits expire at different times. The federally funded $600 weekly payouts to unemployed workers will expire July 31. However, the CARES Act extended state-level unemployment insurance by an additional 13 weeks on top of the 26 weeks that Rhode Island offers. That extension to 39 weeks of benefits will last through December 31, 2020.
WHAT INFORMATION WILL I NEED TO FILE A UI CLAIM?
Before applying online, you’ll need to gather information about your work history and personal information. RIDLT offers a Guide to Filing that includes everything you will need.
WHAT IF I JUST STARTED AT THE JOB I LOST BECAUSE OF COVID-19?
If you lost your job as a result of the coronavirus pandemic, the CARES Act effectively waives work history requirements and allows eligible workers to receive unemployment benefits.