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How to Get Financial Help If You’ve Lost Income

By Rachel Sanborn Lawrence

Lately, I’ve been talking with a lot of people who are struggling with job loss or income disruption due to the coronavirus pandemic. It’s hit so many of us hard, with nearly 20% of the US labor force having filed for unemployment benefits since it hit. (About half of lower-income workers are reporting job or wage loss, by the way, and unemployment is rising faster for two groups: people of color and women.) And the #1 question I’m getting is “How do I replace this lost income so I can pay my bills?”

The good news is that you have resources to explore — from federal and state benefits to lines of credit to other kinds of financial assistance. Though this pandemic has made some things (like unemployment backlogs) more challenging than they’d normally be, it’s also motivated legislators, companies, and people across the country to expand benefits, relax requirements, and step up to help each other.

The below roundup isn’t meant to be 100% comprehensive, but it is where I usually tell people to start — along with taking a financial inventory to know what’s coming in and going out and deciding how you’ll cut back on spending.

Unemployment

If you’ve lost your job, had your hours cut, or been furloughed due to COVID-19, you can likely file an unemployment claim. The CARES Act added federal money to state unemployment benefits — which means that through the end of July, you should be eligible for $600 per week from the US government if you qualify for even $1 a week of state benefits. (If your state opens up and you’re called back to your job, you might lose eligibility, though.) The legislation also (at least temporarily) extended unemployment eligibility to include business owners, contractors, freelancers, and gig workers.

Many states are still working through a backlog of claims and struggling with updating their systems. I generally recommend filing as soon you’ve been laid off or furloughed. Even if there’s a delay in processing, you’ll get retroactive payments when your claim is processed. You can look up your state’s info here, and see our rundown of how to file for unemployment here.

Help with your bills

You don’t have to figure out how to make ends meet alone! A good place to start is your local community action agency (CAA) — they can help you to figure out what you’re eligible for and apply for it. You can also look at Need Help Paying Bills and Find Help.

Temporary Assistance for Needy Families is a federally funded program run by the states that can provide help with several types of bills. Each state has different requirements (and different names). You might also qualify for other, more specific federal programs — check the government Benefits Finder to see what might apply to you.

Mortgage

The CARES Act mandated federally backed mortgage providers (like Fannie Mae and Freddie Mac) to provide forbearance of 180 days plus an extension of another 180 days to homeowners who are facing financial challenges from COVID-19. You won’t pay any extra fees except normal accrual of interest — but you should know that sometimes, accrued interest gets added to the principal of loans after forbearance ends, meaning you might pay interest on the interest.

You’ll need to contact your loan provider to see if they’re federally backed and to understand what their terms are (some lenders are tacking missed payments to the end of a mortgage, but it’s been reported that others are requiring a lump sum “balloon payment” of the missed months after the forbearance period ends). You can find out who your mortgage provider is here. If they’re not federally backed, contact them anyway to see if they’re offering something similar.

Rent

Tenants who live in buildings bought with federally backed mortgages are protected from eviction through July 25 via the CARES Act. That’s only about 28% of all rental units, according to one report, and it can be hard to know if this applies to you. Many cities and states have enacted emergency rent relief programs and policies on eviction, as well. (You can see a state policy scorecard here.) Right now, though, it’s up to the landlord in many, many cases. We’ll update you here if any new tenant-protection laws get passed. In any case, you’ll need to reach out to your landlord as soon as you can to let them know you’re struggling — your Community Action Agency might be able to help (or connect you to help).

Healthcare

If you still have a job, you may now have more options for healthcare. On May 12, the IRS announced it was relaxing rules for employers so that workers can change plans midyear. (Usually, changes to your work-sponsored health insurance have to wait until “open enrollment” — a set time window each year — unless you have a “qualifying life event” like a change to your family.)

These changes could mean you’ll be able to switch plans, add or remove family members, sign up if you haven’t, or drop out if you want. That can be especially helpful if you’re furloughed or have had your income cut and need to change pricing options, or if you’re concerned that your current coverage isn’t enough.

If your employer offers flexible spending accounts for healthcare, you might be able to sign up for one, add or remove money from the plan, or even use up money you didn't get to spend in 2019, which you otherwise would have lost out on. These benefits could apply to any employee whether or not your hours were cut, but your employer has to opt in — they aren’t applied automatically — so check with your HR department.

If you've lost your job, you’re likely to need a new health insurance option. Healthcare.gov is the first place to start. You’ll be asked if you think your income might qualify you for Medicaid, a low-cost, federally funded program administered by the states. (If you’re over 65, you can also explore Medicare.) If you aren’t eligible for Medicaid, job loss is a qualifying life event for all other insurance options, so you don’t need to wait for open enrollment.

Child care

The IRS also relaxed its rules for flexible spending plans for “dependent care assistance.” If you have one of these plans through your job (and you're still employed), you might be able to make changes to it as well. That could be a real money saver if your child care costs have gone down with the kids at home. Ask your HR department if this applies to you.

Groceries and food

The Families First Coronavirus Response Act put $900 billion into Food and Nutrition Service programs and expanded eligibility.

The Supplemental Nutrition Assistance Program, aka SNAP (formerly known as food stamps), is the primary federal food assistance program. You need to apply through your state office (find it here). If your application is accepted, you’ll receive assistance via an electronic benefits transfer (EBT) card, which works like a debit card — you use it to pay your grocery bills. There are rules for what you can use it to buy (basically, groceries only, plus grocery delivery fees during the pandemic). Right now, Expensify.org is also offering to reimburse $50 on your SNAP receipts.

Other food programs:

Gas and electricity

The federal Low-Income High Energy Assistance Program (LIHEAP) can give you help with utilities. It’s administered locally, and you can find your state’s contact listing here. Your local community action agency can often help you with this.

Phone and internet

Lifeline and Link-Up are national programs to provide phone and broadband service if you meet income eligibility requirements. Eligibility for the program was relaxed temporarily during the pandemic. Many cell phone and internet companies are also offering basic access packages for free or very cheap, and some have extended extra data to all customers — the Federal Communications Commission has detailed list.

Support from your community

Mutual aid societies

A mutual aid group is a grassroots organization, with no government, corporate, or charity involvement (though they could include local businesses). That means that there are no guarantees, but they’re also often very simple and direct. Basically, a community comes together to pledge support for each other in times of need. Whoever needs help gets it. It can include cash, food, supplies like masks, physical assistance (like help with transportation or chores), or other support. It’s often organized by neighborhood, but sometimes by other type of community (such as LGBTQIA+).

Mutual Aid Hub is a resource to find existing groups near you — they’ve curated a bunch of coronavirus resources, including instructions for building your own group. This list of localized resources for COVID-19 is a great place to start.

Lending circles

Lending circles are another way for communities to support one another — this time, by pooling money as a group to lend it out to each other at little or no cost. Typically, each member of the group gets a turn at receiving the loan. Lending circles might even serve as a way to build credit, if they’re reported to credit agencies. Mission Asset Fund is one non-profit organization that helps people to start or join lending circles responsibly.

Crowdfunding

Crowdfunding platforms are another way to mobilize your community and call for support. GoFundMe has a landing page for people affected by COVID-19, so there’s a chance that it might direct good-hearted strangers your way as well.

Credit and loans

Another way to replace lost income is through the credit that you have available. I typically recommend reviewing all of your credit sources to see how much you have available to you, then look at the lowest interest rate for each (you’ll probably want to start with the lowest rate).

If you’re a homeowner, now might be a good time to open a home equity line of credit (HELOC) or home equity loan, if your mortgage is for less than 80% of the value of your home. You can also look to use credit cards to get you by during this emergency. If you choose to do this, look at the interest rate on your current cards — but also see if you can find low-interest introductory rates or balance transfer offers on new cards. You can take a look at our guidance on going through your lines of credit here.

If you have current loans, now also might be a good time to call your loan provider — you may be able to negotiate a lower rate, and they may have set up new policies for deferment or forbearance during the pandemic.

Tax relief

The deadline to file and pay your 2019 taxes was extended to July 15, 2020. Note that if you got a stimulus check, that money was sent from the IRS, but it is not an “advance” on a tax refund — it’s extra.

If you’re self-employed, you’ll be able to defer your employer share of the Social Security tax for 2020 — half will be payable at the end of 2021 and half at the end of 2022. You can also claim a tax credit (for 2020, aka you’ll get it in 2021) if you have to pay sick leave to yourself or your employees.

Help from Ellevest

Our team of financial planners and career coaches are working to help you, as well. Here are a few of our recent guides:

And finally: If you have questions, we have answers. We’ve been answering all the money and career questions from our community since the pandemic began. Take a look through all our previous answers. If you don’t see your question answered, email questions@ellevest.comand we’ll answer you personally. We’re here for you.


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You may or may not have noticed that we linked to nerdwallet.com for information about mutual aid groups. FYI, NerdWallet, Inc (“Solicitor”) serves as a solicitor for Ellevest, Inc. (“Ellevest”). Solicitor will receive compensation for referring you to Ellevest. Compensation to the Solicitor will be $20 per membership activated. You will not be charged any fee or incur any additional costs for being referred to Ellevest by the Solicitor. The Solicitor may promote and/or may advertise Ellevest’s investment adviser services. Ellevest and the Solicitor are not under common ownership or otherwise related entities.

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Rachel Sanborn Lawrence

Rachel Sanborn is the Director of Advisory Services at Ellevest and a CFP® Professional. She oversees Ellevest’s coaching teams and works with Ellevest members to help them be the boss of their money.