Help For Individuals During The Coronavirus Crisis
As of April 16,2020, twenty- two million Americans are out of work and have applied for unemployment benefits. The Coronavirus crisis has hit many industries hard: restaurants, bars, airlines, hospitality, live music, sports, movie theaters. Stay at home orders and the closure of non-essential businesses have taken an enormous toll on our economy with the goal of “flattening the curve” and preventing additional deaths from COVID-19. If you have been struggling financially because of the Coronavirus crisis, there are a number of ways both the federal government and the New York State government have sought to provide relief.
Congress passed the Families First Coronavirus Response Act on March 18, 2020, which provides for two weeks of paid sick leave if are unable to work because you are subject to quarantine or are experiencing symptoms of COVID-19 or if you are caring for a family member that is impacted. Additionally, it gives 12 weeks paid sick leave if you are caring for a child while their school is closed. This paid sick leave applies to Americans who work have been employed for at least 30 days and work for either a small- or mid-sized company, or for the government. Also provided for in the Act is free Coronavirus testing for all Americans regardless of health insurance status. Please note, this does not cover the cost of treatment only the cost of the test.
On March 25, 2020, Congress passed the $2 trillion economic relief package called The Coronavirus Aid, Relief, and Economic Security Act or “CARES” Act. The stimulus legislation provides for a direct payment of $1,200 for each adult, plus $500 for each child in the household. The payments start to phase out at the $75k income level and would be cut off at the $99k level. Individuals will use the income from their 2019 tax returns to qualify, or their 2018 income, if they have not filed their 2019 return yet. The Internal Revenue Service has already started sending the stimulus payments into individual’s bank account (provided they have the direct deposit information already). Please note, individuals on fixed income, such as social security, will also be entitled to these benefits. Some recipients have complained that creditors and even their existing bank, have attempted to seize the stimulus check for monies owed on a judgment or overdraft balances. However, New York Attorney General, Letitia James, announced on April 18, 2020, that the stimulus checks will be protected from garnishment. (If you experience any issues in accessing your stimulus funds, please contact our office or the Attorney General’s office directly at https://ny.ag.gov/)
New Yorkers with student loan debt should know that the CARES legislation defers all federal student loans until November 2020. This relief is not automatic and student loan borrowers should contact their servicer to request to defer their payments. Borrowers with private student loans who are unable to make their payments should also contact their servicers to see if they are any options for them.
The CARES Act also extends unemployment insurance for an additional 13 weeks up to a maximum of 39 weeks. In New York, unemployment benefits are covered for 26 weeks, so New Yorkers would get benefits for the maximum under the Act, 39 weeks. Regular unemployment benefits will be boosted by an additional $600 weekly. The maximum benefit here in New York is now $504, so the maximum benefit that New Yorkers could see under this legislation is $1104 a week. Eligibility for unemployment insurance would also be expanded to cover more workers, such as freelance independent contractors, gig workers and the self-employed. However, due to the enormous number of claims being filed and the Department of Labor’s unemployment system being overwhelmed, many Americans who need to file unemployment claims, still have not been able to do so or are waiting for benefits. Governor Andrew Cuomo has vow to overhaul the state’s archaic unemployment system. The Department of Labor has increased staffing at their call centers, adding thousands of workers, and retooled the unemployment benefits website. However, many New Yorkers who need help still are not getting any. New York has been swamped by more than one million claims for unemployment benefits, which is approximately four times the number after the 2008 recession.
Even if a household is receiving unemployment benefits and the onetime $1200 payment, the economic reality can still be quite stark. With unemployment, comes the loss of health insurance. Maintaining coverage under COBRA can be prohibitively expensive, $2500 or more for a household of four. Plus, there is also the deducible to take into account. Furthermore, the Trump administration has specifically refused to allow a waiver for the period to apply for Obamacare.
Another large expense that many New Yorkers are struggling with is their housing expense. Whether it is rent or mortgage, there has been some action on both the state and federal levels to makes sure that people are able keep their housing for the duration of the crisis. Renters are receiving only limited protection. Governor Cuomo has stopped evictions for the duration of the crisis, but has not supported a rent freeze. However, he has stated that he does not want a massive spike in evictions at the end of the crisis either. He wants landlords and renters to work out some sort of deal to pay back any rental arrears, but he has not released any specifics on how that would work. Presently, there is legislation under consideration in the State Assembly to provide rental relief for New Yorkers, but it is unclear whether such a law will be passed.
New Yorkers homeowners with mortgages have more specific relief than renters. Last month, New York Governor Andrew Cuomo has announced a directive to the New York Department of Financial Services that will require mortgage servicers to suspend mortgage payments for 90 days based on the financial hardship for borrowers who have loss of income due to the Coronavirus. According to Governor Cuomo, “we’re not exempting people from their mortgage payments, we’re just adjusting the mortgage to include those payments at the back end.” The directive also includes a 90-day grace period for borrowers making loan modification payments. Plus, the directive would ensure the suspension would not have a negative effect on borrowers’ credit reports. Mortgage borrowers should contact their servicers because not all mortgage servicers are regulated by the Department of Financial Services in New York. Servicers who are not regulated by NYDFS may have alternate programs to those listed above. While these measures will help mortgage borrowers, there is presently no relief to suspend rental payments that has been announced