On August 8, 2020, President Donald Trump signed one Executive Order and three Presidential Memoranda to boost economic aid as the United States continues to suffer from the COVID-19 pandemic. President Trump no longer wanted to wait on Congress and decided to take unemployment benefits, housing and evictions, student loans, and payroll taxes into his own hands. Here is what you need to know:
Unemployment Benefits
On March 13, 2020, the President declared a national emergency, and on April 18, 2020, he declared that a major disaster existed in all States and territories as a result of COVID-19. Now, to provide further financial assistance, President Trump directed up to $44 billion from the Disaster Relief Fund be made available for lost wages assistance to eligible claimants. The Federal government will pay 75% of this wage replacement if the corresponding State agrees to supplement the other 25% for the program. In order for the State of North Carolina to be eligible, it must meet the following conditions:
- the Governor must make a request on the FEMA Administrator for a grant for lost wages assistance and agree to the cost-sharing requirement; and
- the Governor must administer delivery of financial assistance for lost wages in conjunction with the State’s unemployment insurance system
Subject to the limitations above, the lost wages assistance program authorizes the Governor to provide a $400 payment per week to eligible claimants starting from the week of August 1, 2020. An “eligible claimant” is someone who:
- Received, for the week lost wages assistance is sought, at least $100 per week of any of the following benefits:
- Unemployment compensation, including Unemployment Compensation for Federal Employees (UCFE) and Unemployment Compensation for Ex‑Service members (UCX);
- Pandemic Emergency Unemployment Compensation (PEUC), under section 2107 of the CARES Act;
- Pandemic Unemployment Assistance (PUA), under section 2102 of the CARES Act;
- Extended Benefits (EB);
- Short-Time Compensation (STC);
- Trade Readjustment Allowance (TRA); and
- Payments under the Self-Employment Assistant (SEA) program; and
- Provides a self-certification that the claimant is unemployed or partially unemployed due to disruptions caused by COVID-19
The lost wages replacement program will last until December 6, 2020, or until the $44 billion from the Disaster Relief Fund reaches $25 billion, whichever occurs first. It will also terminate in the event that Congress decides to act on additional unemployment compensation.
Housing and Evictions
In President Trump’s Executive Order, he instructed the Secretary of Health and Human Services and the Director of the Centers for Disease Control and Prevention (CDC) to consider whether any measures temporarily halting residential evictions for failure to pay rent could be reasonably necessary to prevent the further spread of COVID-19.
President Trump instructed the Secretary of the Treasury and the Secretary of Housing and Urban Development to identify all available Federal funds that could provide temporary financial assistance to renters and homeowners who, because of the financial hardships caused by COVID-19, are struggling to meet their monthly rental or mortgage obligations.
President Trump further instructed the Secretary of Housing and Urban Development to take action to promote the ability of renters and homeowners to avoid eviction or foreclosure resulting from financial hardships caused by COVID-19. Such action may include encouraging and assisting public housing authorities, affordable housing owners, landlords, and recipients of Federal grant funds in minimizing evictions and foreclosures.
Student Loans
In March 2020, President Trump suspended Federal student loan payments and temporarily set their interest rates to 0 percent. The CARES Act provided similar relief, but was set to expire on September 30, 2020.
President Trump has now instructed the Secretary of Education to take action to effectuate appropriate waivers of and modifications to the requirements and conditions of economic hardship deferments described in section 455(f)(2)(D) of the Higher Education Act of 1965.
President Trump instructed the Secretary of Education to provide such deferments to borrowers as necessary to continue the temporary cessation of payments and the waiver of all interest on student loans held by the Department of Education until December 31, 2020.
All persons who wish to continue making student loan payments may still do so.
Payroll Tax Obligations
President Trump instructed the Secretary of the Treasury to defer the withholding, deposit, and payment of payroll tax on wages or compensation paid during the period of September 1, 2020, through December 31, 2020. The Secretary of the Treasury was also instructed to explore avenues, including legislation, to eliminate the obligation to pay the taxes deferred, which means this deferral could eventually turn into a tax elimination.
This deferral is subject to the following conditions:
- The deferral shall be made available with respect to any employee who makes less than $8,000 a month calculated on a pre-tax basis; and
- The amounts deferred will be deferred without any interest or penalty.
