How the 2nd Stimulus Package Changes Pandemic Unemployment Assistance (PUA)

The $900 billion 2nd stimulus package extended two critical programs that provide additional financial relief to unemployed Americans: Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation (PEUC).

The PUA made it possible for self-employed, freelancers, independent contractors, and gig workers to access unemployment benefits for the first time. It was due to expire at the end of December. The second stimulus approved the program for a total of 50 weeks, an additional 11 weeks. PUA expires now on March 14, failing a further extension under the new Administration. If you haven't exhausted your PUA benefits by the deadline, you have until April 5, 2021. No new applications will be accepted after March 14.

Pandemic Emergency Unemployment Compensation

The pandemic emergency unemployment compensation (PEUC) program authorizes states to provide an additional 13 weeks of federally funded unemployment benefits to everyone who has used up their state benefits. Retroactive pandemic unemployment assistance was extended to March 14, 2021, rather than the previous start date of January 2020.

Supplemental Unemployment Benefits and Stimulus Checks

The 2d stimulus package enacted a temporary supplemental unemployment benefit of $300 per week for all unemployed workers, half of what was provided by the CARES Act that expired in July. It also included authorization for a one-time payment of $600 for individuals or as much as $1,200 for joint filers. The new Congress is working to increase the stimulus payment to $2000.

Stimulus payments will be made via electronic deposit through the Automated Clearing House (ACH) network. If you're already in the system, the IRS says you should see your deposit within ten days. If you haven't been receiving benefits by direct deposit, expect it to take longer.

Prepare for a Cashflow Crunch

It will take some time to access PUA benefits as the process of implementing the program works its way through logistical red-tape. Federal authorities suggest that you expect to live a couple of weeks without unemployment compensation. If you're relying on PUA to cover bills, you might need to adjust your budget during the gap period. The authorities promise that the system will catch up, and you'll retroactively receive everything that you qualify for in a lump sum check.

If you weren't already receiving PEUC or PUA benefits but believe you are eligible, apply to your state unemployment office. You won't receive retroactive benefits, but you should still receive the extra $300 supplement unemployment benefit.

The Process

There is no universal, streamlined process for securing your PUA benefits. Your first task should be to check in with your state unemployment office. In general, it appears that most states will require that you first apply for state unemployment and then file an application for PUA. Some states require that you first be denied state unemployment benefits before you apply for PUA.

You will be required to demonstrate that you're able to work, but you cannot do so due to COVID-19. Examples would be quarantine and closures, or that you're taking care of others who have been diagnosed with COVID-19 or are suffering from it yourself.

If you can work remotely and receive a full salary, you are not eligible for PUA. However, if your salary has been diminished, you might qualify for partial insurance benefits.

While each state has different requirements, the most common documents you'll need to submit with your application are:

  • Identification card provided by your state
  • Social security number or Alien Registration Number
  • Postal address
  • Bank account information if you select direct deposit
  • Form 1040, Schedule C, F, or SE
  • Multiple income statements to prove your eligibility, such as W-2s, paycheck stubs, bank receipts showing deposits, excel, or other business income records.

Key Takeaways:

  • Monitor Congressional actions on the recently passed stimulus bill.
  • Get in touch with your state unemployment office to learn what is required and how to prepare your application.
  • Direct deposit is going to be the fastest way to receive your money.
  • Insulate your budget against a temporary cashflow crunch.
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