The Clock Is Ticking on Coronavirus Relief as Expirations Loom

Expanded unemployment benefits, eviction freezes, more set to go away soon

display of hundred dollar bills, job layoff notice, application for unemployment insurance benefits and an eviction notice

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John Waggoner

AARP

En español

Published July 21, 2020

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, providing widespread but temporary relief to many of those affected by the COVID-19 pandemic. Those provisions expire this year — some very soon — unless extended or replaced by new legislation. Here's a timeline of what goes away, and when.

July 25: Eviction relief

The CARES Act gave eviction protection to renters who live in federally subsidized or federally backed housing. It also gave relief to those who rent from landlords who have multifamily mortgages in good standing from the Federal Home Loan Mortgage Corp. (Freddie Mac) or the Federal National Mortgage Association (Fannie Mae). The relief applies only to evictions for nonpayment of rent, and rent is still due. All of those provisions end July 25, and after that date, landlords may give delinquent renters a 30-day notice to leave.

July 31: Unemployment benefits

The unemployment rate in June was 11.1 percent, down from a high of 14.7 percent in April, according to the U.S. Bureau of Labor Statistics. The CARES Act provided for an extra $600 a week on top of regular unemployment benefits. (All unemployment benefits are subject to state and federal income tax.) The program ends July 31.

For the 17.8 million people unemployed, the drop in benefits would be a jolt. In Florida, people receiving the maximum unemployment benefit would see their weekly check fall from $875 to $275. In Maine, the maximum weekly check would fall from $1,045 to $445.

Aug. 8: Paycheck Protection Program (PPP)

The PPP, which extends loans to small businesses affected by COVID-19, will stop taking applications after Aug. 8. The program was set to expire June 30, but Congress passed an extension. The loans will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent and utilities. Forgiveness will be reduced if full-time head count declines, or if salaries and wages decrease.

Aug. 31: Mortgage forbearance

Those who have mortgages owned by Freddie Mac or Fannie Mae are also eligible for mortgage forbearance, which means that you don't have to make the payment right now. You still owe the money, either as a lump sum or tacked on to your mortgage. Forbearance isn't the same as forgiveness.

The U.S. Department of Housing and Urban Development has also imposed a halt to evictions and foreclosures from single-family properties with mortgages insured by the Federal Housing Administration. The moratorium on foreclosures also applies to FHA-insured home-equity conversion mortgages (commonly known as reverse mortgages). Both moratoriums end Aug. 31.

Sept. 30: Student loan payment suspension

The CARES Act allows you to suspend payments to your federal student loans until Sept. 30. It also reduces your interest rate to zero during that time. The law didn't apply to private student loans. If you're in default on your federal student loans, your wages, tax refund and Social Security benefits, including disability benefits, can be garnished after Sept. 30.

Dec. 31: 401(k) hardship loans and withdrawals

You can take a penalty-free early distribution from your defined benefit retirement plan, such as a 401(k), until the end of the year. You need to be experiencing coronavirus-related financial hardship, such as a job loss or COVID-19 illness. The waiver applies to withdrawals of up to $100,000 since Jan. 1. Income taxes aren't waived, but you have three years to pay them, as well as three years to pay the plan back. Also, the limit on loans from retirement accounts has been increased to $100,000, from $50,000, and payments on both new and existing loans can be deferred for a year. The CARES Act also suspended required minimum distributions from defined contribution retirement plans. All of these go away on the last day of the year.

John Waggoner covers all things financial for AARP, from budgeting and taxes to retirement planning and Social Security. Previously he was a reporter for Kiplinger's Personal Finance and  USA Today and has written books on investing and the 2008 financial crisis. Waggoner's  USA Today investing column ran in dozens of newspapers for 25 years.

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