Congress has reached agreement on a new $900 billion COVID-19 stimulus package. At time of writing, reports say the bill could be voted on and sent for the president’s signature as early as the evening of December 21.
It’s important to note that there are some key differences between this bill and the Coronavirus Aid, Relief, and Economic Security Act (CARES) Act passed in March. Below, we’ll dive deeper into the details of the new stimulus package so you can get an idea of how it may help you and your family.
Cash assistance for individuals and families
Under the new stimulus package, qualifying adults will receive a second stimulus check of up to $600 and an additional $600 per qualifying child*. This is lower than the $1,200 cap per eligible adult, but up from the $500 per dependent child we saw with the first check.
The same income limits seen in the CARES Act apply here. So, if you earn more than $75,000, you’ll receive less than $600 or nothing, depending on your entire income. If you’re a married couple who earns up to $150,000, you may receive $1,200.
Unemployment insurance benefits
To provide relief for workers who have been affected by the pandemic, the CARES Act offered an additional $600 per week in special unemployment insurance benefits. This was on top of traditional unemployment benefits, which are state-dependent and usually range from $200 to $500.
The new stimulus package would offer $300 per week in additional federal unemployment benefits for 11 weeks, through March 14, 2021. Keep in mind that payments will not be retroactive. If you earned a minimum of $5,000 per year in self-employment income, but do not qualify for the Pandemic Unemployment Assistance benefit, you’ll receive $100 weekly.
The new stimulus will extend the moratorium on evictions (set to expire at the end of this year) to January 31. It also includes $25 billion emergency rental assistance. However, it’s currently unclear how the money will be distributed.
Under the Supplemental Nutrition Assistance Program or SNAP, needy families receive benefits to supplement their food budget. The goal is to encourage recipients to purchase healthy food. The new bill will provide $13 billion in increased benefits for this program.
Small business loans
To support hard hit small businesses, the bill would reopen the Paycheck Protection Program, which stopped accepting applications for the first round of loans in August. In addition, the PPP will designate $15 billion for independent movie theaters, cultural institutions, and live venues while expanding eligibility to non-profits, TV and radio broadcasters, and local newspapers.
Now that the vaccines have finally made their debut, the new stimulus will allocate $20 billion for vaccine funding, to ensure vaccines will be available for those who need them, free of charge. Another $8 billion will be used for distribution and $20 billion for testing.
What you can do to shore up your finances
A check for $600 dollars is not going to solve every financial problem working Americans have. But, now that you know what to expect from the new coronavirus stimulus package, here are some more ideas to help you make the most out of all the benefits that should be included in the new package.
- Use your stimulus check wisely: It may be tempting to use your stimulus check to splurge on something you have been wanting for a while. But it’s best to keep your belt tight and try to stay focused on your long-term financial health if possible. So, if you don’t need the money for immediate necessities, consider putting the extra cash toward your debt, an emergency fund, retirement, or college.
- Continue the job hunt: If you’re unemployed, the reduced federal unemployment benefits of $300 may take a toll on your finances, especially if you were used to the $600. But try to let this motivate you to continue your job search. Add relevant keywords to your LinkedIn profile, resume, and cover letter, keep an eye on social media for opportunities, and network with friends, family, acquaintances, and former co-workers.
- Focus on your student loans: Unfortunately, it looks like the stimulus package does not include measures for student loan forgiveness. Therefore, it’s in your best interest to continue to make your payments if you’re able.
- Create a plan for rent payments: If you’re a renter and worried about how you’ll make your payments in the coming months since the federal moratorium on evictions has only been extended to the end of January, come up with a game plan. Review your lease to determine if there are any financial hardship clauses that could help you out. Inform your landlord about the situation and try to negotiate, or reduce some of your other expenses and pick up a side gig.
Need help with your finances during this time of uncertainty? We’re here for you.
The second coronavirus stimulus package should help ease some of your financial stress. But if you’re struggling with your debt or concerned about making your payments, you may want to take additional actions. Freedom Debt Relief is here to help you explore your options, including our debt relief program. Our Certified Debt Consultants can help you get a stronger financial footing and chart a path toward a better financial future. Find out if you qualify.
*Editor’s Note, December 28, 2020: As of Monday, December 28, President Trump has signed the coronavirus relief bill into law. However, delays in the signing may cause some benefits to be delayed or shortened. In addition, the president has also requested an increase in the stimulus check amount from $600 to $2,000. Votes in Congress are pending at time of writing.
- 3 Things You Might Need More Than a Stimulus Check (Freedom Debt Relief)
- Talk to a Creditor About Loan Forbearance: A Step by Step Guide (Freedom Debt Relief)
- Financial Goals to Prioritize During COVID-19 (Freedom Debt Relief)
- ‘More Help is on the Way’: The Long Wait is Over for Second Stimulus Check, But Will $600 Be Enough? (MarketWatch)