After about a week of posturing, and a last-minute attempt by one congressman from Kentucky to scuttle the deal, Congress passed the Coronavirus Aid, Relief and Economic Security or “CARES” Act late last week that is designed to provide benefits to almost every American who has been affected by unemployment, or reduced employment, due to social distancing guidelines in place advising people to remain at home with the exception of brief, essential travel.
Congress representative Thomas Massie (R-KY, 4th District) in a display of what he called “principle” to the $2.2 trillion emergency coronavirus legislation, forced hundreds of his colleagues to fly back to Washington in order to achieve a quorum in the House. In a rare display of bilateral cooperation, both Democrats and Republicans were furious with Massie for the stunt, which most agreed was purely symbolic, and many medical professionals believe put the lives of the nation’s representatives at risk.
The main features of the legislation will provide benefits for more than 90% of the population. As for anyone who has filed a tax return either for 2019, or 2018, if this past year’s return has not yet been filed, each taxpayer will receive a one-time stimulus payment of $1,200. The Treasury department has estimated that the funds should arrive in the accounts of most Americans by the third week of April.
Also for families with children, each child who is a dependent and aged 16 or under according to the latest return will bring in $500 additional.
The funds will be available in full for all individuals earning $75,000 or less, or married couples filing jointly earning $150,000 or less, tapering down respectively to any individual or married couple earning $99,000 or $198,000 as the case applies.
All stimulus-fund payments will be tax free, and will not be subject to garnishment from creditors, with the possible exception of child support payments, which may be attached if there is a judgment of arrears.
For Americans who are unemployed, the stimulus payment does not have to be calculated as income as against unemployment benefits.
Which brings us to how unemployment benefits are being adjusted. New Jersey is currently getting slammed. New Jersey’s Division of Unemployment Insurance announced earlier this week that since social distancing has been put into place, 52% of state workers have applied for some sort of benefit. Right now, New Jersey has changed the online process in order to keep the system from crashing. Online applications are being staggered according to the last four digits of your social security number, and you have a one-hour window each day, depending on your social security number, in which you will be permitted to apply for benefits.
Criteria and eligibility has been greatly loosened. The state is permitting, for the first time, independent contractors and self-employed workers to apply for benefits if they can substantiate that they have lost business as a result of COVID-19. Applicants need to certify their eligibility and provide identifying materials including social security number, birth date and names of employer(s). Workers can cite loss of work, due to the virus, as the cause of need. Also, workers are eligible for up to $600 per week in lost income. For now, four months of potential benefits have been allocated. This benefit is predicated on loss of work, and is subject to income tax withholding. So it is different from the stimulus package.
The Division of Unemployment says they are sorting through claims as quickly as they can, but it is unclear how strict they will be on substantiation, especially since Governor Phil Murphy said that the aim is to get benefits out within a week or two after filing. Applicants can opt to receive direct-deposit benefits to a bank account or benefits mailed out on a debit card. Of course, the state retains the right to audit beneficiaries after the fact for fraudulent claims.
Workers who are able to work from home, and those receiving paid sick leave or paid family leave are not covered. New entrants to the workforce who cannot find jobs are also ineligible.
As for other features of the bill, the government has provided small businesses with loans up to $10 million, with priority given to women-owned businesses, new businesses and those run by anyone “socially and economically disadvantaged.” A separate $10 billion in emergency small business grants of up to $10,000 is also set aside—an unprecedented measure from the Small Business Administration.
There is a separate $500 billion pool of money set aside for bailing out larger businesses hurt by the crisis with emergency loans. The business loans will be overseen by a Congressional committee meant to ensure that the money is not wasted or spent in a fraudulent fashion. President Trump, members of his family and members of Congress and their families will not be eligible for any relief money for businesses controlled by them.
The law seeks to encourage companies receiving government money to spend the money on workers rather than self-enrichment; companies receiving funds will be prohibited from buying back their own stock while receiving help from the federal government and for one year afterward.
Finally CARES sets aside $100 billion for hospitals and health providers as they struggle to meet the challenge of COVID-19 amid widespread shortages of personal protective equipment and depleted staffs. The government wants to make sure hospitals have the supplies needed to combat the condition. However, recently it was revealed there could be a new issue on the horizon. As the government has rushed orders of respirators into the pipeline, there is a shortage of healthcare professionals who know how to use them effectively. So training is going to be the next step in a process for which we are now looking, realistically speaking, at a four-month horizon at best.
Stephen R. Loeb heads the Law Office of Stephen R. Loeb, a civil practice in New Jersey and New York. He can be reached at [email protected].
