Newly Reinstated Federal Unemployment Benefits

Posted by Kevin on January 18, 2021 under Bankruptcy Blog | Comments are off for this article

The $900 billion pandemic relief law enacted on December 27 extended federal unemployment benefits, plus added a new “mixed earner” benefit.

The Coronavirus Response and Relief Supplemental Appropriations Act (CRRSA), was enacted on December 27. It extended unemployment benefits that were in the CARES Act of last spring, although with changes. One of the most impactful of those benefits had expired. Others were about to expire at the end of 2020. For these, the law came in the nick of time. The new law also created a new “mixed earner” benefit for workers with prior income from both wages and self-employment.

The Reinstated but Reduced Extra Federal Benefit

Under the CARES Act, the Federal Pandemic Unemployment Compensation (FPUC) benefit provided an extra $600 benefit per week. This was in addition to the regular state benefit. It expired way back on July 31, 2020.

The new law reinstates this extra federal unemployment benefit, but reduces it to $300 per week. These benefits are now set to last until March 14, 2021.

To be clear, it applies to

supplemental benefits for weeks of unemployment beginning after December 26, 2020, and ending on or before March 14, 2021. FPUC is not payable with respect to any week during the gap in applicability, that is, weeks of unemployment ending after July 31, 2020, through weeks of unemployment ending on or before December 26, 2020.

U.S. Dept. of Labor Press Release of December 30, 2020.

The Extended Benefit for Formerly Self-Employed and Regular W-2 Employees

The CARES Act’s Pandemic Unemployment Assistance (PUA) expanded benefits in two main ways. First, it extended eligibility to the self-employed, gig workers.  Second, it applied to those otherwise ineligible for unemployment benefits, providing benefits for up to 39 weeks.  This program had specific pandemic-related eligibility requirements. It was to expire on December 31, 2020.

The new law extends this benefit’s expiration from that date to March 14, 2021. Also:

For individuals on PUA who have not exhausted their benefit eligibility of up to 50 weeks, the program also provides for continuing benefits for eligible individuals for weeks of unemployment through April 5, 2021.

U.S. Dept. of Labor Press Release of December 30, 2020.

The Extended Benefit for Those Who’ve Exhausted Benefits

The CARES Act’s Pandemic Emergency Unemployment Compensation (PEUC) program gave people an extra 13 weeks of unemployment benefits. Individuals usually get up to 26 weeks of unemployment benefits under state law. Some states provide fewer weeks—sometimes much fewer. CARES added up to 13 more weeks for eligible workers, for up to a total of 39 weeks of benefits. Section 2102(c)(2) of CARES.

The new law of December 27, 2020 added 11 weeks of benefits. This raises the total benefit maximum from 39 weeks to 50 weeks.

The New Mixed Earner Unemployment Compensation

In the new law Congress has tried to fix an unanticipated problem under the CARES Act. People who had prior income from both traditional employment and also self-employment had a tough choice. They had to either apply for traditional unemployment or for the new Pandemic Unemployment Assistance (PUA) for their self-employment income. They could not receive both. This tended to reduce their benefit because some of their income would not count towards the amount of their benefit.

The new law addressed this in a simple but not very precise way. The Mixed Earner Unemployment Compensation (MEUC) benefit gives an extra $100 per week of Pandemic Unemployment Assistance to those who qualify.   To qualify the worker must have earned at least $5,000 in self-employment income in the most recent tax year. One other condition: each state gets to decide whether to sign on to MEUC. So check with your state employment department.

Bankruptcy Filings Continue Down- Better Economy??

Posted by Kevin on March 10, 2013 under Bankruptcy Blog | Be the First to Comment

In May, 2012, I published a blog entitled “Bankruptcy Filings Down- Better Economy?.  My conclusion was that filings were down but the increased cost of filing bankruptcy  may have had more to do with the decrease in filings than the economy getting better.

Well, ten months have passed.  There has been a presidential election.  Certain segments of the economy are doing much better (like the stock market), others not so well (housing).  Filings are down in New Jersey17% from March 1, 2012 to February 28, 2013.   But does that mean that we have a better economy?

Maybe and maybe not.  A few days ago, the Labor Department announced that unemployment was 7.7%, the lowest since the meltdown/recession.  But is that an accurate number?   You see, the unemployment number goes down when employment goes up.  But, it also goes down when  people stop looking for work or take part time work instead of full time. If you consider the number of people who have dropped out the work force or who are working part time, the unemployment number (known as the U-6 unemployment number) is greater than 14%.  So, if you factor in the broader measure of employment (U-6), the economy is still struggling.

How do you apply that to number of bankruptcy filings.  While it is true that if you cannot afford the filing fee, you usually cannot afford bankruptcy, it is also true that if you don’t have any assets or income, creditors have nothing to go after.  So, if you can put up with a few unpleasant telephone calls, people can generally avoid their creditors.  As they say, you cannot get blood out of a stone.  So, why file?

Unless the US slips back into recession, real unemployment should go down eventually.  People will shift from government benefits to wage paying jobs. Rather than writing off your debts like in the old days (1980’s),  credit card companies, hospitals and even doctors are selling your debt for pennies on the dollar to hedge funds or other debt collection agencies.  Those guys do not go away.  First, you will get letters and calls.  Eventually, when they find out where you work, you will get judgments against you (if they do not have them already), and then wage garnishments.  Something to think about.

So, if you have been out of work for a year or more, and get a job- congratulations.  But if you also have judgments or owe lots of money and you get a  job, you may want to give serious thought to speaking with a reputable debt counselor or bankruptcy attorney.  Why?  Because at that time you have options.  However, if you want until your wages are garnished, your only recourse may be bankruptcy.   The automatic stay, which occurs when you file a bankruptcy petition, will stop a garnishment dead in its tracks.

Word to the wise.

Just got a Job, Think about Bankruptcy

Posted by Kevin on January 16, 2012 under Bankruptcy Blog | Be the First to Comment

Now, that my seem like a harsh title.  You may have spent an extended period on unemployment because of the prolonged economic downturn.  While you were on unemployment, you used up all your savings and went into debt.  You sent out hundreds of resumes and spent hours on the net looking for a job- even if it was for less than your prior jobs.  Things are now looking up.  You are back to work.  But, now is the time to be wary.

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