Questions and answers on COVID-19 relief package

The $900 billion COVID-19 bill President Trump signed Sunday as part of a $2.3 trillion package that included government funding is set to provide financial relief for millions of Americans suffering from the economic fallout of the pandemic.

The measure renews some programs that briefly lapsed, while providing new aid for struggling households and small businesses.

Here are answers to some of the most important questions about the legislation.

When will people start receiving jobless benefits provided by the bill?

Millions of Americans may need to wait several weeks before they start receiving some unemployment benefits included in the bill, many of which are extensions from the CARES Act in late March.

The Pandemic Unemployment Assistance (PUA) program was renewed Sunday to provide further relief for gig workers, contractors and others who don’t qualify for traditional jobless benefits. The bill also renewed Pandemic Emergency Unemployment Compensation (PEUC), which provides up to 13 weeks of unemployment aid to workers who have already exhausted state benefits.

But because Trump did not sign the bill until after each program expired Saturday, a lapse in benefits may be unavoidable.

Roughly 14 million Americans were on track to receive benefits through the two programs as of Saturday, said Elizabeth Pancotti, a policy adviser at Employ America, a progressive organization. She said it could take state unemployment agencies a month or longer before they’re able to restart payments because of the delay in passing and signing the bill.

“Some states may be able to stand this up in a week or two if we get guidance quickly from [the Labor Department], but allowing the programs to lapse has created such a mess at many state UI offices, so it could be 4-6 weeks before workers receive payment,” she wrote in an email.

Michele Evermore, an unemployment expert at the National Employment Law Project and a volunteer member of President-elect Joe Biden’s transition review team for the Labor Department, said the Labor Department might be able to prevent a gap in payments from the PUA and PEUC programs.

“In theory, it’s possible that they would change the dates on the contracts,” she said.

The legislative text means states could modify the contracts with the Labor Department that govern federal aid, instead of signing new ones altogether. That could mean the benefits continue uninterrupted, or at least avoid losing a week of coverage once the dust settles.

The relief bill also provides an additional $300 per week in unemployment insurance through March 14, half of the original $600 weekly boost passed through the CARES Act that expired on July 31. Pancotti said it could take more than a month for some workers to see the $300 weekly benefits.

Losing a single week of unemployment benefits from the three programs would mean $11 billion is delayed getting to recipients.

When will people receive the $600 direct payments?

The IRS has not released any information about the timing of the direct payments since Trump signed the bill on Sunday, but there are indications that payments could start going out in a matter of days.

A spokesperson for Senate Finance Committee Chairman Chuck Grassley (R-Iowa) said Monday that disbursements are expected to start this week. Treasury Secretary Steven Mnuchin said on Dec. 21 that he expects people will start receiving payments this week, though his comments were made before Trump waited until Sunday to sign the measure.

The IRS did not immediately respond to inquiries from The Hill on Monday.

The relief package provides for a second round of direct payments for most Americans of up to $600 per adult and the same amount per dependent child under 17.

The IRS is expected to send payments to people by direct deposit in cases where they have taxpayers’ bank information. Otherwise, the payments are expected to be sent to people in the mail in the form of paper checks and debit cards.

The IRS has until Jan. 15 to issue advance payments of the rebates. People whose payments weren’t issued by then, or who didn’t receive some or all of their first payment, can receive the amounts to which they are entitled by claiming a tax credit on their 2020 returns.

Individuals with adjusted gross income of up to $75,000, and married couples with income of up to $150,000, qualify for the full payment amount of $600 per adult and child. The amounts decrease by $5 for every $100 of income over those thresholds.

As was the case with the first round of payments enacted earlier this year, adult dependents are not eligible for checks.

The new law allows U.S. citizens married to spouses without Social Security numbers to receive payments. Mixed-status households where at least one spouse has a Social Security number would also be able to receive payments for any children with Social Security numbers. This change is retroactive to the first round of payments.

When Trump signed the law, he called for the direct payments for adults to be increased from $600 to $2,000. Democrats support increasing the amount of the direct payments for both adults and children, but most Republican lawmakers oppose increasing the check amounts. Sen. Roy Blunt (R-Mo.) told reporters last week that he didn’t think legislation to increase the amounts to $2,000 could pass the Senate.

Can small businesses that already received federal aid apply for more?

Yes. The bill renewed several programs that have already proved successful in helping small businesses, most notably the Paycheck Protection Program (PPP), which offers forgivable loans to small businesses that keep workers on the books.

Both businesses that already received PPP loans and those that did not apply will be eligible for a new round of aid for small businesses.

While the first two rounds had a combined $649 billion, the latest round is more limited at $284 billion. It also has more restrictions, to ensure it gets to businesses with more genuine needs and help root out fraud.

The forgivable loans are limited to businesses with up to 300 employees, and at least a 25 percent decline in receipts in any given quarter relative to 2019. Companies can obtain loans amounting to 2.5 times their monthly salary costs, though the figure rises to 3.5 for the hospitality industry, with a $2 million limit across the board.

The Trump administration has just 10 days from the time of enactment to get regulations out the door, meaning programs should be up and running in the first half of January.

There’s good reason to think that the rollout of the loans will be smoother than in the program’s chaotic and often-frustrating debut in the spring, as smaller lenders faced a tough time getting set up quickly and the rules kept changing.

“The first round, banks were ill-equipped to run the process. They didn’t have portals set up,” said Stephanie O’Rourk, a tax partner at CohnReznick.

“Now, obviously, they do and they understand the process to transmit to the Small Business Administration,” she said, while adding that they will still need time to update their systems with the latest requirements.

There are special carve-outs for small and local lenders, to ensure the big players don’t eat through all the funds.

The law also set money aside for other forms of business relief, such as $20 billion for Economic Injury Disaster Loans grants and expanded access to Employee Retention Credits.

How long will new eviction protections last?

The new relief bill extends the Centers for Disease Control and Prevention (CDC) national ban on evictions through Jan. 31, giving more than 10 million Americans another month of protections. The measure also provides $25 billion to fund rental assistance programs for tenants who were unable to pay rent and owe landlords thousands of dollars.

Housing policy experts and consumer advocates have praised Congress for extending relief to struggling renters and the Department of Housing and Urban Development for stretching its own ban on foreclosures on homes with federally backed mortgages. Even so, tens of millions of Americans could still face eviction or foreclosure when those protections lapse next year.

Experts note that renters may need to take steps to prevent evictions under the moratorium and have urged states to help residents navigate the process. Renters will also be responsible for any rent and fee due to their landlords during the eviction ban.

The moratorium extended in the COVID-19 legislation was originally done through executive action, with the CDC declaring a health emergency. Biden could extend the moratorium after he takes office on Jan. 20.