Substantial Benefits May be Available to Tenants Who Have Lost Jobs Due to COVID-19

Industry News,

Encourage your COVID-19 affected renters to apply for unemployment and other benefits that might be available to help them pay their rent. Under the recently passed Federal “CARES Act,” many workers, including “gig” economy workers, that have lost jobs or have experienced reductions in work hours will be entitled to significantly greater unemployment benefits, and in some cases up to four (4) months of their full compensation in addition to other payments for workers earning less than $99,000 per year – these benefits and Federal subsidies should be taken into consideration when working with impacted renters who claim they cannot pay rent.

The Federal Government’s CARES Act creates a temporary Pandemic Unemployment Assistance program, which provides unemployment insurance coverage to self-employed individuals, independent contractors and those with limited work history. In order to qualify, someone must be available for work but unable to do their job as a result of the pandemic.

Requirements and payout ratios vary from state to state. In California, its unemployment insurance program provides about 46% of working wages, up to set limits. The maximum unemployment benefits amount to just $450 per week. Accordingly, if someone previously earned $1,000 a week ($4,000 a month), he or she would receive only $450 in weekly unemployment coverage, or $1,800 per month from the state of California. However, the new CARES Act adds a federal payment equal to about $600 per week to the State’s unemployment benefits. Accordingly, this hypothetical “out of work” worker could receive as much as $4,200 a month. In some cases, low income workers might be eligible to receive more in benefits than amounts earned when working.

The benefits will not last forever, however. The extra $600 weekly payments “sunset” and end on July 31, 2020. Coverage of “gig economy” freelancers under the Pandemic Unemployment Assistance law starts retroactively on Jan. 27 and lasts until the end of the year, but each individual freelancer is entitled to receive only up to a maximum of 39 weeks of benefits under the new Federal law.