How to Treat CARES Act’s Changes to Unemployment Benefits

Since the Coronavirus Aid, Relief, and Economic Security (CARES) Act was enacted in March, millions of unemployed workers have claimed unemployment benefits that were more generous than they normally would’ve received, including those who would’ve received no benefits at all. The CARES Act’s boost in benefit levels expired on July 31 and its eligibility expansions and additional weeks of benefits will expire on Dec. 31.

It’s likely that some of your residents or applicants have benefited from the CARES Act’s changes to unemployment insurance benefits. We’ll go over which unemployment compensation payments are to be included in annual income calculations.

Unemployment Benefit Measures

The CARES Act addressed the three issues of benefit levels, duration, and eligibility through the following measures:

Federal Pandemic Unemployment Compensation (FPUC). This measure provided an additional $600 a week on top of any other unemployment compensation for which a worker is eligible, including the other CARES Act measures, through July 31. HUD has determined that FPUC benefits meet the definition of temporary income and must not be included in annual income.

Pandemic Emergency Unemployment Compensation (PEUC). This measure provides 13 weeks of federally funded benefits to people who exhaust their regular unemployment insurance benefits. PEUC is the COVID version of the additional weeks of emergency unemployment compensation that the federal government has routinely provided in past recessions. HUD has determined that PEUC benefits must be included in annual income.

Unemployed workers who exhaust their PEUC benefits are then eligible for state Extended Benefits (EB) if unemployment is severe enough in their state to have triggered on EB. Up to 13 or 20 weeks of EB can be available in a state, depending on its unemployment rate and unemployment insurance laws. Normally, states are responsible for half the costs of EB, but the Families First Act enacted just before the CARES Act increased the federal share from 50 percent to 100 percent through the end of the year.

Pandemic Unemployment Assistance (PUA). This program provides unemployment benefits to people who don’t normally qualify for unemployment insurance. PUA provides up to 39 weeks of benefits to:

• People who aren’t eligible for regular unemployment insurance or PEUC and, in some cases, to those who have exhausted their regular state benefits and EB;
• People who are unemployed for a variety of COVID-related health or family reasons, like taking care of a child whose school is closed or a family member with the virus;
• Self-employed workers and those seeking part-time work; and
• Workers who don’t have a long-enough work history to qualify for state UI benefits.

HUD has determined that PUA benefits must be included as annual income.