2020 has not been a kind year. The world is still under the grip of the Covid-19 pandemic, and America is no exception. With record-high case numbers and death tolls, the American people are still struggling to cope with the unprecedented onset of the Coronavirus. One of the most destructive effects of the pandemic has been the widespread weakening of the labor market and the disruption to the everyday lives of American families. Unemployment reached its highest peak since the Great Depression in the April of 2020, causing millions to lose their jobs and rendering them unable to pay for basic living expenses such as rent, utilities and daycare. Although the unemployment rate has seen improvement in recent weeks, dropping to 10.2% in July, American families will continue to feel the economic poison of the virus on their everyday lives, for years to come.
Congress’ first attempt to alleviate this economic pressure on American families resulted in the CARES Act, which was passed in March 2020 and provided economic relief for eligible Americans in the form of stimulus checks, unemployment benefits and other assistance. But the CARES Act was far from a silver bullet. The US economy saw a mild boost in performance and Americans are still looking for ways to make ends meet for themselves and their children. A new relief bill, the HEALS Act, has stalled midst stiff negotiations between Senate Republicans and House Democrats in Washington, but is expected to pass when Congress reconvenes after Labor Day.
But what exactly is in the HEALS Act? More importantly, how will it affect American families?
Here is a guide to help you prepare for the HEALS Act, no matter what your scenario is.
If you are a couple, with no dependents.
The HEALS Act is likely to treat married couples with no dependents much the same as those who are unmarried. You will very likely qualify for a second $1,200 stimulus check, as long as each spouse does not earn more than $75,000 a year. If you are joint tax filers, then you will receive a single joint check of $2,400, provided that your total income does not exceed $150,000.
If you are a parent(s), with dependents.
Whether you are a single parent or otherwise, the HEALS Act is very likely to grant you an extra $500 for each dependent. This is the same as the CARES Act of March 2020, except for one important distinction. While the CARES Act limited the eligibility criteria to only dependents of 17 years of age or younger, the HEALS Act is likely to stretch that eligibility to dependents of all ages. This means that parents and caregivers of any dependent will qualify for the additional $500.
Furthermore, as it stands, the HEALS Act does not stipulate a criteria for the maximum number of dependents, meaning that your stimulus check would be proportional to the size of your family. This new broadened eligibility would not only provide a much-deserved boost for parents and caregivers, but it also means being able to effectively scale your finances to each of your children’s needs, without having to cut financial corners.
Head Attorney at WLG Law Group in Chicago, Timothy Walczak, suggests that “the best way to utilize the added funds is by saving as much as parents can. During times of financial uncertainty, unexpected costs make a much larger dent in one’s finances than normal.”
If you are a parent and a frontline worker.
We can all agree that those who will help America defeat the pandemic are those who are in direct contact with the patients of the virus on a regular basis. Doctors, nurses, paramedics and janitors all play a primary role in overcoming the virus. But these roles also pose an obvious health risk. While ‘hazard pay’ has been proposed by congress members from both sides of the fence, it is still under ongoing debate. There are many hazard pay proposals, including one by Senator Mitt Romney (R-UT), granting up to an additional $12/hour pay for essential workers earning less than $90,000 in the form of refundable tax credit. House Democrats have also pushed for funding frontline workers with an additional $13/hour up to $25,000.
While hazard pay is proving to be difficult to include into the next bill, Walczak suggests that “even if Hazard Pay is omitted from the next relief bill, individual states often have their own Hazard Pay legislation that can be utilized by frontline workers who are in direct contact with Covid-19. In fact, a number of local governments have recently started implementing hazard pay measures for these workers.”
If you are a parent and pay child support.
Much like the CARES Act, the HEALS Act does give the Treasury Department permission to withhold some or all of your stimulus check funds, if you are delinquent on child support payments.
Walczak advises that “child support payments should be budgeted and managed as effectively as possible, in order to avoid legal implications which can undermine unemployment and stimulus benefits even further.”
If you are a parent and unemployed.
This is where the waters get murky. The additional $600 in unemployment assistance that Americans received under the CARES Act expired on July 31st. And Congress chose not to extend its terms. Moreover, as it stands, the HEALS Act is unlikely to renew it beyond the regular unemployment benefit that you receive from your state. Unfortunately, that means that parents who are relying on standard unemployment insurance are likely to receive a lot less in additional assistance, if any. Senate Republicans have tried to rectify this issue by proposing a severely minimized $200 benefit earlier in August.
But do not panic! The HEALS Act is far from complete. In fact, unemployment assistance is perhaps the most contested issue amongst congress members. Democratic lawmakers continue to pressure the Republicans in Congress to renew the $600 enhanced unemployment assistance. House Speaker Nancy Pelosi (D-CA) stated that the HEALS Act “falls far short” of what Democrats expect to be sufficient for American families. Additionally, and some would say surprisingly, Senate Majority Leader Mitch McConnell (R-KY) stated that he would be “prepared to support” whatever the final bi-partisan relief agreement is. This refreshing compromising attitude does provide some hope that the HEALS Act will maintain its loyalty to unemployed Americans, especially parents.