By The Preservation Compact

Category: News

What You Need to Know About Unemployment Insurance and COVID-19

At The Preservation Compact, our bread and butter is preserving affordable rental housing, especially the naturally occurring stock. Today the most profound preservation need is to stabilize tenants affected by job loss.

Nationally, more than 40 million people have lost their jobs since mid-March, including nearly 1.2 million in Illinois. Analysis by the Institute for Housing Studies at DePaul University shows that 60% of people in occupations at high risk for job loss or disruption due to the pandemic are renters. Workers in those occupations are more likely to be Black and Latinx, and many facing job or income loss due to the pandemic live in neighborhoods hardest hit by the last crash.

To help people get the support they need now, and develop solutions for the future, we first need to understand how Unemployment Insurance works – and doesn’t work – now.

If you only have a few minutes to learn about unemployment, keep these 6 things in mind:

  1. The expanded benefits are substantial. Normally, unemployment represents less than half of a recipient’s prior wages. Now – until the federal expanded benefit expires – some people will earn the same amount – or more – in unemployment benefits as they did at their job. Thanks to the CARES Act:
    • People who are approved receive more money than normal (the standard benefit of around half their previous salary + $600 per week, through July.)
    • The benefits last longer. Benefits usually last up to 26 weeks in Illinois, now unemployed Illinois workers are eligible for an additional 13 weeks, for a total of 39 weeks.
    • People who don’t usually qualify for unemployment, like gig workers and independent contractors, are now temporarily eligible.
  2. The expansion is time limited. If Congress doesn’t approve an extension, the expanded benefits will expire at the end of July. This means that weekly benefits will return to their pre-CARES Act level—around half of a recipient’s previous weekly salary.
  3. It can take a long time to receive the first payment. Unprecedented volume and issues with roll-out in Illinois make it hard to submit an initial application, and processing time is longer than usual for many applicants. Keep in mind:
  4. Everyone should apply. The experts we spoke with said that everyone who has lost their job, been furloughed, or seen their hours reduced should apply – even if they aren’t sure they qualify. Eligibility requirements are complicated, and the worst that can happen is that the application is denied. There are no negative consequences as long as applicants are truthful and applications are submitted in good faith.
  5. Anyone who is denied should appeal. Experts say people can sometimes receive an initial denial if their case is complicated or because of an error on their application. As a result, applicants who believe they are eligible should always appeal. Legal aid organizations may be able to help some applicants with appeals, and people can appeal on their own. Legal Aid Chicago has a free helpline to help navigate the unemployment process.
  6. Some people are not eligible for unemployment. Despite the expansion, some of the most vulnerable workers cannot—or do not—access unemployment benefits.
    • Immigrants without work authorization are not eligible for unemployment, even if they meet all of the other criteria.
    • People who have exhausted their 26 week unemployment benefit prior to the current crisis, people who did not earn enough over the baseline period to qualify for benefits, people who are paid under the table—or whose employers did not report their compensation—and individuals with limited or no formal work history may not be eligible.
    • Research has found that nationally, only 1/3 of people without jobs receive unemployment benefits. Some of these people are ineligible, but eligible workers sometimes fail to receive benefits due to uncertainty about eligibility, confusion about the application process, or general unfamiliarity with unemployment benefits

Case Study: How do the expanded benefits under the CARES Act compare to standard Illinois unemployment benefits?

John earns an annual income of $40,000. His rent is $1,300 per month, which means he is slightly rent burdened, but he can pay his rent without too much trouble. His employer saw a substantial decrease in business due to COVID-19 and laid John off. He doesn’t have any dependents, and he earned enough during the baseline period to qualify for unemployment benefits. He begins receiving benefits on April 1.

Under the current CARES Act unemployment expansion, he receives $962 per week – his standard state benefit of $362 (this is roughly equivalent to 48% of his average previous base earnings), plus the additional $600 provided under the CARES Act through the end of July. This is actually a little more than he earned when he was working, so he is able to continue paying his rent without any trouble. He begins looking for a new job, but no one is hiring. The CARES Act expansion is not renewed at the federal level, so at the beginning of August, his benefit amount falls to only $362 per week. This is less than half of what he earned when he was working, and his rent now represents more than 80% of his monthly income.

Still have more questions? Read on for a more detailed overview of key information!

Which workers in Chicago are most affected by COVID-19?

According to research from the Institute for Housing Studies, Chicago renter households, particularly those that were lower-income and already cost-burdened, and workers of color, are more likely to be employed in occupations most vulnerable to significant disruption and layoffs due to COVID-19. In south and west side submarkets, over half of renter households have at least one member employed in a likely impacted occupation. These areas have higher levels of at-risk workers such as those employed as cashiers, janitors/building cleaners, and cooks. Conversely, the Loop and Lincoln Park/Lakeview submarkets have smaller shares of potentially vulnerable renter households, with higher shares of workers employed in less at-risk occupations such as management analysts, lawyers/judges/ magistrates/other judicial workers, and accountants and auditors.

Who is eligible for expanded unemployment assistance under the CARES Act?

Everyone who qualifies for unemployment under normal state eligibility guidelines will automatically receive the relevant CARES Act expanded benefits, including an extra $600 per week, and the additional 13 weeks of assistance.

The CARES Act also created a separate program for people who are business owners, self-employed, independent contractors, or have limited work history. People who qualify under this program must first go through the standard state application process and be denied standard state benefits before they can apply for the new program, which is formally known as Pandemic Unemployment Assistance (PUA).

In addition to people in the categories above, PUA also expanded eligibility to include:

  • Workers who are temporarily laid off because their places of employment closed due to the COVID-19 crisis. Under Illinois Department of Employment Security’s (IDES’s) “emergency rule,” individuals in this situation do not have to register with the employment service; they are considered to be actively seeking work as long as they are prepared to return to their jobs as soon as their employers reopen.
  • Employees who have been diagnosed with COVID-19 or who must stay home to care for spouses, parents, or children diagnosed with COVID-19, are eligible for unemployment benefits as long as they meet all other eligibility requirements, including being able and available for work and actively seeking work from the confines of their homes.
  • Generally, people who voluntarily leave their job are not eligible for unemployment. However, a person who voluntarily leaves their job for reasons related to COVID-19 may also qualify in some cases.

What should someone who is unemployed or who has lost hours or income do?

In Illinois, every individual who is unemployed or underemployed should file a claim for unemployment benefits, even if they are not sure they are covered by the unemployment system.

People who have lost hours or who have seen their income reduced are generally not eligible for assistance unless their pay was reduced below 47% of weekly wages. However, if a worker’s hours vary week to week, they should still apply. Even if a worker’s hours weren’t cut quite enough to qualify, they may qualify for future weeks depending on the number of hours they work going forward.

What is the application process? What if I run into problems?

Everyone should begin by applying for unemployment through the Illinois Department of Employment Security.

Gig workers and others applying for PUA must first apply for regular unemployment insurance – as strange as it sounds, being denied for regular unemployment benefits is a mandatory first step in determining eligibility for the extended PUA program. Once an applicant receives that denial, they are able to apply for PUA.

If claimants receive an eligibility determination of $0, they can then appeal that decision by providing verification of wages earned, or submit a claim for PUA.

One thing to keep in mind is that with more people filing for unemployment benefits, it will likely take some time to get through, and system crashes and website glitches are not uncommon. The good news is that once approved, benefits will be back-dated to when the job loss occurred.

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