CARES Act: Unemployment Benefits

by Michelle Smalenberger, CFP® / March 31, 2020

The CARES Act- Unemployment Benefits fee only financial advisor deer park barrington chicago unemployment benefits draft

CARES Act: Unemployment Benefits

Background: Unemployment is a resource available to those when they lose their employment.  It is meant to provide a percentage of the previously earned income while you look for other employment.  During this Coronavirus pandemic there have been Millions unemployed temporarily and/or permanently. Because the length of this pandemic is uncertain and the typical unemployment time may be longer than normal, benefits have been extended.

Timing: Typically, it can take a week before unemployment benefits begin.  The CARES Act provides that the Government will pay for the first week of unemployment, decreasing the wait time for people who need to receive payments.  An extension of time to a potential 39 weeks has been allowed versus the typical 26 weeks or less, depending on your state.


If you find yourself unemployed, even if you’re furloughed temporarily, this should be the first benefit that you apply for to start receiving some income right away.  

  1. The government will cover the first week of unemployment, speeding up the time for you to receive benefits.
  2. With passage of the CARES Act, even those who are typically not eligible for unemployment benefits, because they don’t pay into their State Unemployment system (for example, self-employed consultants), are eligible to receive these benefits.
  3. Those receiving benefits may receive an additional $600 per week, for up to four months.  This increase is being funded by the Federal Government, paying the additional amount to the States so they can pay those who qualify for these benefits.  
  4. If you reach the end of your normal unemployment benefits, typically 26 weeks or less, the CARES Act allows for those benefits to continue for another quarter, or 13 weeks.

An additional benefit created in the CARES Act will allow for States to create a program for future benefits, not benefits payable today.  This program specifically refers to short-time benefits.  Short-time refers to those who have seen hours drop or wages lowered but are still employed.  Not all states provide for benefits for short-time compensation. The Act provided for the Federal Government to pay up to 50% of the costs to put a program into place through the end of 2020.  You can see how this type of a program likely affects many workers even during a normal economic environment.

Interested in the other areas of the CARES Act? We are breaking down these details by section in the following resource. You can click to the particular section you’re interested in directly below if you’d like to read the specifics of those first.  We do encourage you to look through all of the sections that could potentially impact you since this is a very generous bill aimed at keeping our country’s economy strong during and after this pandemic.

Financial Design Studio CARES Act Summary

Like any benefit that becomes available to you it is critical to see if it makes sense to use the provisions allowed.  While a benefit might make your temporary financial situation better, it might not be beneficial in the long term. However, those who need these provisions were created for are likely in immediate need to use the benefits until employment returns to normal.


Recovery Rebates

Coronavirus-Related Retirement Distributions 

Enhanced loans from employer retirement plans

Required Minimum Distributions waived for 2020 

Qualified Charitable Contributions – NEW Above the line deduction 

AGI Limit for Cash Charitable Contributions Limit Temporary Repealed

Student Loan Borrower Relief

Miscellaneous Healthcare Benefits

Unemployment Benefits

Mortgage Forbearance Request


Business Owners:

Paycheck Protection Program & Forgivable Loans

Employee Retention Credit

Payroll Tax Payment Deferral 

Net Operating Losses Loosened

Wondering how this affects your future finances? Schedule a call with Financial Design Studio, financial advisors in Deer Park, to discuss your portfolio today.

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Michelle Smalenberger, CFP®

I have a passion for helping others develop a path to financial success! Through different lenses on your financial picture, I want to help create solutions with you that are thoughtful of today and the future. I have seen in my life the power of having a financial plan while making slight changes of direction from time to time. I believe you can experience freedom from anxiety and even excitement when you know your finances are on track.