Financial Help for Those Impacted by COVID-19

    The time is rapidly approaching for American consumers to review the “accommodations” they received from government and businesses when the coronavirus pandemic hit in February of 2020 and determine if they can survive without them.

    The helping hands extended during COVID-19 are slowly being pulled back as program deadlines arrive and bills, some of which haven’t been paid in months, come due.

    The “accommodations” as the government refers to them, include postponing payments on rent, utilities, credit cards and mortgages, among other things, and receiving direct financial support from the federal government in the form of a $1,200 stimulus check and/or $600 a week supplemental unemployment benefits.

    The deadline for many of those benefits has either passed or is coming up soon, creating yet another crisis for members of Congress, who were on vacation throughout the month of August.

    The most obvious example of those facing trouble are renters who have missed or been late with payments due to the coronavirus. Estimates say that between 30 and 40 million Americans are at risk of being put out on the streets because they can’t pay rent.

    President Trump issued an executive order to prevent evictions that is good through Dec. 31, 2020, though renters must pass a very subjective test to be protected from evictions between now and then.

    Landlords or property owners, are in similar financial straits. They have problems paying off loans on their properties because they’re not receiving regular rent payments.

    The HEROES Act passed by the House of Representatives on May 15, included $100 billion to help renters catch up, but the bill is stalled in the Senate. The chances of relief coming from that anytime soon are not good.

    The next area of concern for consumers could be what to do if credit card companies pull back the concessions they made at the start of the pandemic. Card companies deferred or reduced monthly payments; waived interest and late fees and increased credit limits to help consumers cope with the financial setbacks they faced from COVID-19.

    Will that assistance remain in place indefinitely? Or will card companies decide they’ve done their part and it’s time to go back to business as usual?

    Because there are so many companies issuing credit cards and the industry is acting individually, not collectively, it Is best to go to your company’s website and see how they will handle matters.

    Then, there is the passenger airline industry, which received $25 billion in grants and another $25 million in low interest loans from the CARES ACT to pay salaries. That money runs out Sept. 30.

    A group of 16 Republican senators have proposed giving the airlines another $25 billion to keep flying. If they don’t get it, the airlines already have announced there will be major layoffs come Oct. 1.

    Like the virus itself, nobody knows for sure how much more damage is going to be done to a U.S. economy struggling mightily to regain its footing. The bickering among members of Congress and the President over another relief package isn’t helping.

    The best advice would be to stay in contact with your landlord, credit card companies, mortgage bankers and anyone else you’re doing business with. Let them know your situation and whether you expect things to change.

    Maybe they will still “accommodate” you.

    Some of the financial assistance programs passed include:

    Loans and Credit Card Relief for COVID-19

    It’s no surprise that banks and credit card companies led the way in trying to keep consumers stable financially. When the Federal Reserve lowered the interest rate to zero percent in March, it meant any money-lending institution could make a profitable loan to just about any customer.

    Bank of America details a full list of assistance programs on its website that include waiving non-sufficient fund and monthly maintenance feess and refunds for overdraft fees as well as assistance on credit card and loan payments.

    But you have to visit the company website and make your request for help online.

    » More about: COVID-19 Loans

    Credit card companies, who usually make millions every month off late payment and over-the-limit fees, backed off penalizing their customers. Instead, they waived those fees and some cards even invited customers to skip payments for a month, if they needed the income to handle other responsibilities. Visit your card company’s website and see what types of assistance is still available.

    » More about: COVID-19 Credit Card Assistance

    Other COVID-19 Relief Offerings from Private Businesses

    The most often-repeated message from the big banks and credit card companies is for those negatively impacted by COVID-19 to stay home and use online or mobile app banking services to do their bill-paying and keep track of their accounts.

    The second most-common message was: Call our customer service department for specific help with either personal or small business accounts. The sooner you contact a bank representative or your credit card company, the better.

    The CARES Act: Stimulus Package for COVID-19 Relief

    The federal government giveaways have dominated the news throughout COVID-19 because it was basically free money for consumers and business begging for something to cheer about. The effectiveness of the effort is still being measured, but if nothing else, it gave people a reason to be optimistic.

    If you’re not sure what COVID-19 related assistance programs you might be qualified for from the government, there is a website with answers. Just respond to a few questions and it will tell you what programs and assistance you qualify for.

    Here is a rundown of the most impactful debt-relief options in the stimulus bill.

    $1,200 Coronavirus, COVID-19 Relief Checks

    You got one $1,200 check. You may get a second. You probably shouldn’t count on it.

    Sending a $1,200 stimulus check to consumers making less than $75,000 was one thing Republicans and Democrats have agreed on since the start of COVID-19 relief efforts. Unfortunately, they don’t agree on much else.

    That is why a second stimulus check – the one talked about all summer and the one most eligible Americans had counted on being in their bank account by now – hasn’t been approved and may never get voted on, let alone approved.

    Republicans and Democrats bickered over elements of a relief package for two weeks before going on a month-long vacation. They return Sept. 8 and this will be a very hot topic when they get back in the office. So will passing a budget for fiscal year 2020-2021 that all the departments, agencies and contractors feed off. The fiscal begins Oct. 1. And don’t forget that 35 Senate seats and the entire House of Representatives are up for election Nov. 3.

    That’s a lot of issues and voices screaming at a Congress that hasn’t demonstrated it listens. You’d have to be a serious optimist to think that getting another stimulus check out to Americans in trouble is going to be at the top of their “to-do” list. Tune in the week of Sept. 8-11 to see if this matters.

    Unemployment Benefits

    The $600 “added benefits” check the federal government tagged on to regular state unemployment benefits ended July 31.

    President Trump prolonged the program with an executive order that put another $44 billion up for grabs. The order reduced the benefit to $300 per week and 45 states signed up and were approved for the funds that come from the Federal Emergency Management Agency (FEMA).

    The only states not signed up are Kansas, Nebraska, Nevada, New Jersey and South Dakota. The first four have indicated they will apply for it, while South Dakota has said it definitely will not.
    The benefits are retroactive to Aug. 1, meaning if you have been unemployed since then, you will get a catch-up check, then receive $300 a week until the funding for the program runs out.
    The government projects the “run-out” date to be somewhere in the middle or end of September.

    This program was one of the major stumbling issues during negotiations on a second relief package and will be a contentious issue again if Congress re-opens debate on a relief package. Republicans think it’s too much of a handout and want to reduce it to $200 a week. Democrats think it’s a necessary lifeline and want the full $600 a week subsidy renewed until the end of January 2021.

    401(k) Penalties Waived

    The federal government waived the 10% early-withdrawal penalty for taking money from your 401(k) retirement fund. Qualified individuals can withdraw as much as $100,000 to help them get through this crisis. The money must be withdrawn by Dec. 31, 2020.

    Paycheck Protection Program for Small Businesses

    The Paycheck Protection Program was the second-most popular part of the CARES Act because it allowed thousands of businesses to stay afloat despite quarantine measures in every state that kept residents at home for at least two months.

    The decision to quarantine most of the country was a shot-in-the-arm to delivery services, but shut down restaurants, shopping malls, theme parks and sporting events that count on live customer experiences to make their money.

    The PPP stumbled out of the gate for several reasons, but found its purpose.  It distributed $525 billion in loans to 5.2 million businesses to help with payroll and business expenses. The average loan amount was $101,000, which most businesses will not have to pay back.

    Unfortunately, the deadline for joining the program has passed and it too is a disputed part of a second stimulus package. Republicans want to renew it, but Democrats do not.

    Big Business Gets Some Breaks

    Companies with more than 500 employees and deemed “severely distressed” received large grants or loans.

    The passenger airline industry, for example, received $25 billion in grants (money they won’t pay back) and another $25 billion in loans they are expected to pay back.

    There was $17 billion in loans to companies considered critical to national security and $425 billion for other businesses, states and cities.

    Hospitals and Health Care Centers Get Help

    The stimulus bill set aside $100 billion to help hospitals that were hit hardest by the pandemic. The money was intended to allow them to purchase protective gear for health-care workers, testing supplies and support emergency operation centers.

    Community health centers and public health agencies like the Center for Disease Control and Prevention also will receive funding to help them get better prepared for the next crisis.

    The Health and Human Service department re-opened the Provider Relief Fund portal to for providers who participate in state Medicaid and CHIP programs and had not yet received a payment from the $50 billion General Distribution.

    The deadline for applying is Sept. 13, 2020.

    Other Beneficiaries

    Some of the agencies expected to play a big part in the recovery from coronavirus received much-needed help from the stimulus package.

    The food stamp program, now called SNAP, received $25 billion to help the hungry; local schools and colleges received $31 billion; the Federal Emergency Management Agency got  $45 billion that it returned to help fund the added benefits for unemployment; and local transit systems received $25 billion.

    Help from Government Agencies

    Several agencies in the Trump Administration didn’t wait on Congress to pass a stimulus bill. They took action on their own. Here are some of moves you might find useful.

    Paid Sick Leave

    Congress actually passed a bill called the Families First Coronavirus Response Act to help workers in smaller businesses deal with using sick leave to care for their families.

    The target audience for the new law is companies with less than 500 employees. Those companies will receive a tax credit on next year’s tax bill for offset the cost of providing it to their employees.

    The intention of the new law is to give two weeks of paid sick leave at 100% of your normal salary – up to $511 per day – for a total of $5,110. That is just the first of many qualifiers for this program so check with your company’s Human Resources Department before making plans.

    Benefits of Paid Sick Leave
    • You can get two weeks of paid family and medical leave at two-thirds your regular pay rate to care for an individual subject to quarantine.
    • You could get an additional 10 weeks paid family and medical leave at two-thirds pay, up to $200 a day (and $10,000 aggregate), if you’re a parent caring for children whose school has closed.
    • Employees must have worked at least 30 days to be eligible.
    • Businesses with less than 50 employees may be exempt from providing leave due to school closing or childcare unavailability if that jeopardizes the viability of the business.
    • Businesses with more than 500 employees are exempt from the law.
    • Nursing homes, hospitals and health care providers also are exempt.

    Tax Break … Sort of

    The Treasury Department moved its tax-filing deadline to July 15 from the traditional date of April 15. About 13 million taxpayers were expected to use the summer deadline for filing.

    If you expected a refund, you can file anytime.

    Student Loan Interest Suspended

    President Trump issued an executive order on Aug. 8 that gave student loan borrowers the option to suspend payments through Dec. 31, 2020 without penalty.

    The order also provided that borrowers would pay no interest on federal student loans through Dec. 31, 2020.

    To suspend payments, borrowers should contact their service providers and enroll in the forbearance program.

    If you can afford to make payments, all of the money will go toward reducing your balance, since no interest charges are being collected. It’s a great way to get ahead.

    Federal Reserve Cuts Interest Rate to 0%

    The Federal Reserve did its part to slow the economic downturn by reducing interest rates to 0%.

    The move didn’t initially help its intended targets — a stable stock market and lower borrowing rates for consumers and small businesses – but that has changed dramatically.

    The Dow Jones Industrial Average, which peaked at 29,568 on Feb. 12, 2020, went as low as 18,213 on March 23, but has since surged back to 27,832 on Sept. 4.

    Interest rates on home loans, meanwhile, dipped below 3% for some borrowers.

    Small Business Administration Provides Access to Loans

    The coronavirus could be lethal for small businesses, considered the economic lifeline in most communities, but the Small Business Administration is trying to prevent that.

    The SBA is offering low-interest working capital loans of up to $2 million for small business and nonprofit agencies affected by COVID-19. Small businesses would pay 3.75% interest on the loans and nonprofits would pay 2.75% for terms of up to 30 years.

    Many states and cities are offering low-interest loans for small businesses. More information is available on the SBA website.

    What’s Next in COVID-19 Relief Options?

    The Democrats were so impressed with the public reception of the CARES Act – especially the $1,200 stimulus check — that they rushed an even bigger package the House of Representatives that had no chance of staying intact when and if the Senate looked at it and, not surprisingly, it collapsed..

    The HEROES Act was a $3.4 trillion economic stimulator that included handouts for nearly every individual and business in America.

    Of course, it proposed a second stimulus check, reviving the ever-popular $1,200 check to anyone making under $75,000 but threw in a bonus for families, saying that up to three children could join in the fun of having a sizeable amount of money land in your bank account with no restriction on how it could be spent.

    The $600 ‘bonus check” for unemployment also was part of the bill, extending that barrel of cash six more months, through the end of January 2021.

    And then there was a $200 billion cutout for “Hazard Pay” to reward all the essential workers who put their lives in danger throughout the coronavirus pandemic. The list of eligible workers included first responders, grocery store workers, cleaning and maintenance, truck drivers and just about anybody else who reported to work during the crisis.

    Senate Republicans denounced the HEROES Act as nothing more than a liberal wish-list. They put together a $1 trillion package dubbed the HEALS Act that included another $1,200 stimulus check, but cut back or cut out nearly everything else the HEROES Act promised.

    Representatives from both sides say negotiations on a compromise bill will resume when Congress returns Sept. 8, but there are no voices of optimism for a quick resolution.

    Scammers Alert

    The Federal Trade Commission has posted a warning that scammers are looking at panic-stricken consumers as easy prey for opportunities to take money or steal personal information.

    Scammers could be using fake social media posts, texts or email posts that sound like news on treatments or information on where to make donations for relief funds and it’s all fake.

    Here are the FTC’s warnings about scammers:
    • Don’t click on links from sources you don’t recognize
    • Ignore emails claiming to come from the Center for Disease Control
    • Avoid online offers for vaccinations or treatments
    • If someone is asking for donations in cash, gift cards or wiring money, stay away!
    • Beware of “investment opportunities” in any company claiming that says it can detect, prevent or cure coronavirus.
    Bill Fay

    Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it seven years ago, helping birth Debt.org into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering college and professional sports, which are the fantasy worlds of finance. His work has been published by the Associated Press, New York Times, Washington Post, Chicago Tribune, Sports Illustrated and Sporting News, among others. His interest in sports has waned some, but his interest in never reaching for his wallet is as passionate as ever. Bill can be reached at bfay@debt.org.

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