Dec. 31 Deadlines Loom: What the New Stimulus Act Changes

With all the recent talk about the new end-of-year coronavirus relief package, you would be forgiven for losing sight of what was at stake, had the legislation not become law.

As of Dec. 31, 2020, programs that provide the following COVID-related relief were scheduled to end:

• The Pandemic Emergency Unemployment Compensation program, which provides an extra 13 weeks of benefits to people who exhaust their state benefits
• The Pandemic Unemployment Assistance program, which provides benefits to gig workers, freelancers, the self-employed
• A national moratorium on eviction for both renters and homeowners
• Forbearance on federal student loans
• Penalty-free early withdrawals from 401(k)s, IRAs, and other eligible retirement amounts (up to $100,000 and with a valid reason)

However, Legislation addressing most of these expirations—along with funding for additional programs—was signed into law by former President Trump on December 27. Then, on March 11, 2021, President Biden signed off on a $1.9 trillion COVID-19 relief bill, the American Rescue Plan. The American Rescue Plan provided many Americans with another round of stimulus checks, extended enhanced unemployment benefits, increased certain tax credits, and significantly expanded healthcare subsidies, particularly for low-income and middle-class Americans. The American Rescue Plan extends and expands upon many of the original Covid-relief measures. Here is an abbreviated list of some of those measures:

• Stimulus payments in the amount of $1,400 for a single person or $2,800 for a married couple filing jointly. (Individuals earning up to $75,000 get the full payments, as do married couples with incomes up to $150,000.)
• The Pandemic Unemployment Assistance program, which provides aid to self-employed, temporary workers, and gig workers is extended until September 6, 2021.
• The Pandemic Emergency Unemployment Compensation program, which provides an additional 13 weeks of benefits beyond the typical 26 weeks that states provide to jobless workers, is extended until September 6, 2021.
• The package also includes a temporary increase for the child tax credit for 2021. (The credit would begin to phase out for those earning more than $75,000 a year, or $150,000 for those married filing jointly.)
• In February, President extended the ban on foreclosures through June and allowed homeowners to enroll in mortgage payment forbearance programs through then. 
• In addition, in January, the Department of Education extended the pause on federal student loan payments and collections through the end of September 2021.

What's at Stake

Here's a brief description of programs that were set to expire, and the new measures, passed by President Biden, that have extended and/or expanded upon the original relief programs.

Extended Weeks of Unemployment Benefits

The CARES Act extended the number of weeks unemployment benefits would be available from 26 weeks to 39 weeks, in most cases.

BLS statistics also indicate that approximately 3.9 million of the 10.7 million unemployed in the U.S. are long-term unemployed, having been jobless for 27 weeks or more.

The Pandemic Emergency Unemployment Compensation program, which provides an additional 13 weeks of benefits beyond the typical 26 weeks that states provide to jobless workers, was extended until September 6, 2021.

Unemployment Benefits for Self-employed Individuals

Another CARES Act initiative called the Pandemic Unemployment Assistance (PUA) program provided unemployment benefits to classes of workers not normally eligible—namely gig workers, the self-employed, and contractors.

According to the BLS, in Nov. 2019 the unemployment rate among self-employed workers was just 2.1%. As of Nov. 2020, the rate is 5.9%.

The Pandemic Unemployment Assistance program, which provides aid to self-employed, temporary workers, and gig workers is extended until September 6, 2021.

Eviction Moratorium

Previous legislation under the CARES Act gave limited protection against evictions on homes backed by federal mortgage loans, those receiving some type of federal funding, and tenants in housing backed by federal mortgage loans. 

The Department of Health and Human Services (HHS) through the Centers for Disease Control (CDC) expanded those protections to cover virtually all renters, in September.

On March 29, 2021, the CDC extended the federal moratorium through June 2021. The $1.9 trillion American Rescue Plan that was signed into law in early March did not include an extension of the eviction moratorium.

Student Loan Deferment

Finally, the CARES Act granted a reprieve to students paying off federal student loans by deferring payments on those loans through September 2020, suspending all interest due on these loans, and allowing non-payment of loans to count as payments for certain programs that require them.

In August, President Trump extended the deferment until Dec. 31, 2020. On Dec. 4, 2020, Secretary of Education Betsy DeVos announced an extension of the forbearance until Jan. 31, 2021. Then, in January, the Department of Education extended the pause on federal student loan payments and collections through the end of September 2021.