With 30 million people (and counting) claiming unemployment, the coronavirus pandemic has rocked our economy like an earthquake. And if you’re self-employed — a freelancer, an independent contractor, or a gig worker, as some 57 million people in the US are — you might already have been on shaky ground. When work schedules are inconsistent, when unemployment isn’t usually part of your safety net, when health insurance, time off, and taxes are more complicated … all of those things make a downturn like this harder to navigate, and possibly scarier.
The good news is that the government made a few changes recently that include support for you. The bad news is that those changes may also be tough to navigate right now. Here’s the intel on what’s changed recently (and, tbh, keeps changing) and where you can look for other help.
The latest on filing for unemployment
The CARES Act (aka the stimulus package) temporarily changed federal law to extend unemployment benefits to self-employed people. That’s huge, because — as you likely know if you’re a freelancer or work the gig economy — usually that’s not the case. The government has also boosted those benefits through the end of July, so now, if you qualify for even $1 of state unemployment benefits through these new criteria, you’ll automatically receive an extra $600 per week from the federal government.
That’s all great … but there have been complications. On April 5, the Department of Labor issued guidelines for states that defined eligibility for unemployment benefits. Thirty-four members of Congress sent Labor Secretary Eugene Scalia a letter saying that those guidelines appeared narrow and “could make states think they need to exclude workers who Congress clearly intended to receive unemployment compensation.” You’ll need to check with your state to see what you’re eligible for. You can look up your state’s info here
And while the stimulus package was passed federally, unemployment is administered by the states. The law requires all states to comply, but it’s taking time to upgrade and implement these changes. And meanwhile, with so many millions of people filing for unemployment, many states are struggling to keep up. That’s understandable, given the scope of this crisis and the infrastructure changes that need to be made … but it’s really, really frustrating.
Our best recommendation right now:
Try filing for unemployment now to see what your state is currently saying.
If your state’s online filing system doesn’t give you a way to file, you’ll want to try calling them on the phone. Be prepared for this to take a while, so block out time and have something to do while you’re on hold.
Once your claim is processed, you’ll get retroactive payments too (so even if it takes a while for them to be sent to you, you’ll eventually get paid benefits for the whole time you’ve been unemployed).
If your claim is denied, you have a right to appeal the decision, and your state should give you information about how to do this. You should keep filing weekly claims until your appeal is processed. Meanwhile, reach out to your representatives in Congress to let them know, and stay tuned to this article (we’ll update) to see if any changes or clarifications get made.
Loans and credit
The Small Business Administration has clarified that self-employed people and independent contractors can apply for the new Paycheck Protection Program (PPP) loan as of April 10, whether or not you have employees. This is a low-interest-rate loan funded by the SBA, which you apply for through a bank. It lets you borrow money to help pay yourself (and any employees you have) and cover essential expenses like business rent and utilities. You won’t be eligible for unemployment benefits if you get a PPP loan, but it will be forgiven (meaning you’ll only pay interest) if you use it only for the stated purposes.
The PPP program has seen a few hiccups so far: The first round of funds ran out fast, with news that big companies (rather than small businesses and contractors) received loans through the program. Congress has added more funds and the US Treasury has provided new guidelines for the second time around. If you haven't filed already, you should do so as soon as possible, as the second pool of funds is also limited.
The federal Economic Injury Disaster Loan (EIDL) program is a disaster relief effort, and the coronavirus pandemic is definitely considered a disaster. This program was also re-funded with recent legislation. You may be able to apply for an “advance” of up to $10,000 on a disaster loan — it’s really more of a grant, because it doesn’t need to be repaid.
So you might need to look at other forms of credit available to you. This could be personal loans you’re qualified for or credit cards. If you’re a homeowner, it could be a home equity line of credit (HELOC) or loan. You’ll want to review all your credit sources to see how much you have available and what the lowest interest rate on each is — you’ll start there. Don’t just look at the interest rate you’ve got on current cards — also look for low-interest introductory rates or balance transfer offers. Check out our guidance on going through your lines of credit here.
Grants, funds, and crowdfunding
This is by no means a complete or endorsed list of places to find help — it’s a compilation of resources we’ve seen so far, in hopes it can save you some time. (And hopefully, give you some hope that there are people and organizations here to donate and help.) There may be more halts to funds after the date this was published.
For artists and / or creators
The Actor’s Fund has its own emergency grants and a good list of other grants for creators.
PEN America Writer’s Emergency Fund is assisting professional writers.
The Freelancer’s Relief Fund is paused due to demand, but sign up and you’ll be notified if more funds become available.
CERF is giving relief to creators who are suffering severe health impacts from COVID-19.
COVID-19 Freelance Artists Resource is a good list of grants and emergency funds.
Arts and Culture Leaders of Color Emergency Fund is giving $200 grants for creatives and arts administrators who are Black, Indigenous, and / or People of Color.
Queer Writers of Color Relief Fund is giving a minimum of $100 and max of $500 to eligible applicants.
Kickstarter also has a good list of resources.
You can set up a Patreon crowdfunding page to share with your fans and community.
For restaurant and hospitality workers
The Restaurant Employee Relief Fund has $500 grants available.
The Bartender Emergency Assistance Program is funding emergency grants.
Restaurant Opportunities Center has a list of financial resources.
Another Round Another Rally is distributing $500 relief grants but is holding on phone interviews temporarily while they process existing applications.
One Fair Way Emergency Fund is giving free cash assistance to restaurant workers, delivery drivers and other tipped workers, and service workers.
For gig workers
The Workers Fund gets cash help for low-income and gig workers through The Workers Lab.
National Domestic Workers Alliance gives $400 in assistance to eligible domestic workers.
If you’re gigging with a big company like Postmates or Uber, keep checking in with them to see what they’re individually doing.
You can set up a GoFundMe account to share with your community — the platform also has a dedicated page for COVID-19 help, so it might get you help from other people as well.
Gift Card Bank is giving out gift cards for people in need.
Some federal programs are administered regionally (by state or metro area), and lots of local organizations might be able to help, too — either by working with you to discover available resources or by offering local assistance of their own. Here are a few directories to look at:
Feeding America (local food banks)
Local distributors of federal Food and Nutrition Service programs — the Families First Coronavirus Response Act added $900 billion of funding and more flexibility to programs such as SNAP and WIC, so you can have food to eat through this pandemic. (Also: Expensify.org is also offering to reimburse $50 on your SNAP receipts.)
Need Help Paying Bills has a list of Community Action Agencies by state and county
The Low-Income High Energy Assistance Program (LIHEAP) for help with utilities
Unfortunately, the Families First Coronavirus Response Act doesn’t give independent contractors actual money for sick or family leave if you need to stop working because of COVID-19. But it does give self-employed people a refundable tax credit for putting yourself on leave if you need to because you’re sick, you’re caring for someone who’s sick, or you had to stop working because of shelter in place or self-isolation orders. You’ll claim it with your 2020 taxes.
The CARES Act lets self-employed people defer payment of the 6.2% employer share of the Social Security tax. You’ll be able to defer it over two years, with half due December 31, 2021 and the rest December 31, 2022.
Help from Ellevest
Our financial planners and career coaches are here to help you navigate this (hopefully temporary) new normal. Here are a few of our recent guides:
© 2020 Ellevest, Inc. All Rights Reserved.
Information was obtained from third-party sources, which we believe to be reliable but not guaranteed for accuracy or completeness.
The information provided should not be relied upon as investment advice or recommendations, does not constitute a solicitation to buy or sell securities and should not be considered specific legal, investment or tax advice.
The information provided does not take into account the specific objectives, financial situation or particular needs of any specific person.
Investing entails risk including the possible loss of principal and there is no assurance that the investment will provide positive performance over any period of time.