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Apr 9, 2020

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What to expect if you become unemployed

by | Apr 9, 2020

Family Economic Security, Health

Few events strike more anxiety and uncertainty than the prospect of unemployment – especially during a pandemic outbreak that’s already fraught with anxiety and uncertainty. If the fear of contracting the coronavirus doesn’t make you nervous, the thought of losing your income most likely does — and for good reason, if you earn a low to moderate income.

In the last week of March alone, unemployment filings in Colorado rose to 60,784 – an alarming increase of 207.4 percent from the previous week and an increase of nearly 4,000 percent from the same time in 2019. As non-essential businesses reduce operations or shutter during what’s expected to be a prolonged quarantine for many workers, the numbers of the unemployed are expected to grow to levels unseen since the Great Depression.

Currently, unemployment benefits for Coloradans cannot exceed $618 a week – or $2,472 a month. That figure is slightly above the Self-Sufficiency Standard for Colorado for a single adult household in most of Colorado, but it won’t cover the cost of basic needs if you add dependents to the household. However, the average unemployment benefit is about $400 a week (or $1,600 a month) – far below the Self-Sufficiency Standard in all family compositions in all Colorado counties. Communities of color and people in rural areas tend to be disadvantaged in terms of income and job security, so losing income will disproportionately exacerbate their economic circumstances.

However, if you lost your job or if your employment seems shaky, it may offer solace to know that state and federal officials are ramping up efforts to provide short-term relief amid the COVID-19 outbreak – though such efforts have been slow to leave the gate so far.

Under the $2 trillion Coronavirus Aid, Relief and Economic Security Act (CARES), recipients of unemployment insurance would receive an additional $600 a week for the next four months ending July 31. That effectively doubles the maximum benefit that an unemployed Coloradan could receive – providing that they were employed at least 32 hours a week and can provide proof that they are legally present. Unfortunately, it will take some time for those $600-week-payments to end up in the unemployment checks as the U.S. Department of Labor coordinates with state agencies to get the money flowing.

Private contractors, gig economy and seasonal workers not traditionally covered by unemployment will also receive emergency benefits under the CARES Act, but not yet. The state is advising these workers to keep checking into ColoradoUI.gov while it implements those options. The CARES Act also provides new coverage for people diagnosed with COVID-19, people unable to work because they’ve been asked to self-quarantine, people caring for family members with COVID-19 and people caring for children whose schools and daycares are closed.

All U.S. taxpayers are also entitled to an Economic Impact Payments from the government. Each taxpayer would receive up to $1,200 plus additional funds for dependents. Though hardly enough to cover a monthly rental or mortgage payment in most parts of Colorado, these payments could help many people weather the economic storm — providing that the quarantines are short-term, the economy recovers soon and people quickly find work.

Filing for unemployment
The Colorado Department of Labor and Employment CDLE advises people to file for benefits after they’ve completed their first day at work through their online portal. As a result of high call volumes, the Colorado Department of Labor is asking that people with last names that start with A through M apply on Tuesday, Thursday or Saturday after noon. People with last names that begin with M through Z should apply on Mondays, Wednesdays and Fridays before noon.

If you are eligible for unemployment insurance payments, it can take four to six weeks to receive your first benefit check, but CDLE officials say they are trying to expedite the turnaround to 10 to 14 days. Recipients are not paid for the first week they are eligible. While receiving the benefits, you must report your earnings and your job-search activities every two weeks.

Once you apply, you are required to connect to an employment center through connectingcolorado.com (though you don’t have to be unemployed to take advantage of these services).

Currently, Coloradans can receive unemployment checks for up to 26 weeks, though state officials are pushing to expand the benefit to 39 weeks because of the extenuating circumstances with the public health crisis. Benefit recipients are expected to accept “suitable work” if offered (i.e., within the recipient’s skills, salary range and location).

In factoring your unemployment, CDLE will take severance pay, accrued vacation time, withdrawals from your retirement savings and separation bonuses into account, if you are fortunate enough to receive such benefits. Every week of pay that you receive from those benefits will delay your unemployment insurance payments by one week. On the upside, that policy could also extend the life of your claims if you encounter difficulty re-entering the job market.

Also, keep in mind that unemployment insurance benefits are taxable, so you could opt to withhold a portion for Social Security, and state and federal tax or wait until the next filing period.

Other considerations
While those eligible for unemployment could potentially recover up to 90 percent of their salary with unemployment insurance benefits the CARES Act bonus, that income doesn’t cover other benefits that many employers provide such as health insurance premiums or a matching 401(k). While it might sound tempting to go without health insurance, the risks have never been higher with the coronavirus outbreak still active. We recommend that you enroll in reduced-cost health insurance through Connect for Health Colorado’s website. Because of the COVID-19 emergency, there is a special enrollment period through April 30.

You might also qualify for premium-free public coverage from Health First Colorado (Colorado’s Medicaid program). You can apply for Medicaid, Children’s Health Plan Plus (CHP+) other public health plans through Colorado PEAK’s website.

Depending on your income level, you might be eligible for the Supplemental Nutrition Assistance Program (SNAP) and special assistance for Women, Infants and Children (WIC) online through this link. Check out CCLP’s SNAP Benefit Calculator to see if you qualify.

For other resources related to human service programs available to Coloradans experiencing an income loss, visit CCLP’s COVID-19 Resources webpage.

Closing thoughts
Unfortunately, this health and economic crisis gives more people a window into the instability that Coloradans facing poverty routinely encounter: not knowing how one will be able to afford the basic needs of food, health and housing on a week-by-week basis, not to mention the bureaucracy and the onerous requirements needed just to continue receiving benefits such as SNAP, Medicaid and Basic Cash Assistance.

In particular, the racial disparities between different ethnicities has emerged during the pandemic. As Colorado Rep. Leslie Herod recently pointed out to Colorado Public Radio, many families facing poverty don’t have the option of staying home and filing for unemployment. “We have health disparities that combined, make a very bad situation worse.”

Finally, as pointed out in another CCLP blog, safety net programs exist to help people through difficult times – whether they are facing the coronavirus, temporary setbacks, a recession or struggling with systematic challenges. More Coloradans will soon learn the value of these programs in keeping them afloat during this crisis.

In saying that, we urge you to support the work of CCLP and other advocacy organizations in ensuring that the safety net remains strong for all people facing poverty.

– By Bob Mook

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HEALTH:
HEALTH FIRST COLORADO (MEDICAID)

Health First Colorado is the name given to Colorado’s Medicaid program. Medicaid provides public, low-cost health insurance to qualifying adults and children. It is an entitlement program funded by the federal, state, and county governments and is administered by counties in Colorado. Those who are required to pay must pay a small co-pay when receiving certain health care services.

State Department: Department of Health Care Policy and Financing

Eligibility: Most adults 18 to 64 are eligible for Medicaid in Colorado if their household income is at or below 133% of the federal poverty limit (FPL). Pregnant women are eligible with incomes of up to 195% FPL, while children under 18 may be eligible if the live in a household with income at or below 142% FPL. Some adults over 65 may also be eligible for Medicaid.

Program Benefits: Through Medicaid, low-income Coloradans are eligible for a range of health care services at little to not cost. Services provided include doctors visits, prescription drugs, mental health services, and dental care. Co-pays for certain individuals may be needed for certain services.

Program Funding and Access: Colorado funds our Medicaid program through state and federal dollars. Medicaid is an entitlement program, which means that all who are eligible for Medicaid can access the program, regardless of the funding level in a given year. This does not mean that it is always easy to access Medicaid, even when eligible. And since the program is administered by counties, funding levels for county staff and other administrative roles can make it easier or harder for Coloradans to access the program. On top of this, not all medical providers accept Medicaid which limits the ability of Coloradans to seek health services even if enrolled, such as if the nearest provider is a 2+ hour drive away.

Note: This data is from before the pandemic and does not reflect changes in enrollment rules during the COVID-19 pandemic and public health emergency.

Statewide Program Access 2015-19: Over the study period of this report, an average of 89.0% of the population at or below 133% of FPL (i.e., the population who is likely to be eligible for Medicaid) were enrolled in Medicaid in Colorado.

FOOD SECURITY:
SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM (SNAP)

The Supplemental Nutrition Assistance Program or SNAP helps low-income Coloradans purchase food by providing individuals and families with a monthly cash benefit that can be used to buy certain foods. SNAP is an entitlement program that is funded by the federal and state governments and administered by counties in Colorado.

State Department: Department of Human Services

Eligibility: Currently, Coloradans qualify for SNAP if they have incomes below 200% FPL, are unemployed or work part-time or receive other forms of assistance such as TANF, among other eligibility criteria. Income eligibility for SNAP was different during the study period of this report than today—it was 130% FPL back in 2019 for example. The US Department of Agriculture uses the population at or below 125% FPL when calculating the Program Access Index (or PAI) for SNAP. We follow this practice in our analysis despite Colorado currently having a higher income eligibility threshold.

Program Benefits: SNAP participants receive a monthly SNAP benefit that is determined by the number of people in their household and their income. Benefit amounts decrease as income increases, helping households avoid a sudden loss of SNAP when their incomes increase, even by a minor amount. Benefits are provided to an Electronic Benefit Transfer (EBT) card that can be used to purchase eligible food items, such as fruits and vegetables; meat, poultry, and fish; dairy products; and breads and cereals. Other items, such as foods that are hot at their point of sale, are not allowable purchases under current SNAP rules.

Program Funding and Access: SNAP, like Medicaid, is a federal entitlement program. This means that Colorado must serve any Coloradan who is eligible for the program. As such, funding should not be a limit to how many Coloradans can be served by the program. However, funding for administration of SNAP at the state and county level can limit the ability of county human service departments to enroll those who are eligible. Other program rules and administrative barriers can make it difficult for Coloradans to receive the benefits they are legally entitled to receive.

Statewide Program Access 2015-19: Over the study period of this report, an average of 61.1% of the population at or below 125% of FPL (i.e., the population who is likely to be eligible for SNAP) were enrolled.

FOOD SECURITY:
SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS AND CHILDREN (WIC)

The Special Supplemental Nutrition Program for Women, Infants, and Children, also know as WIC, provides healthcare and nutritional support to low-income Coloradans who are pregnant, recently pregnant, breastfeeding, and to children under 5 who are nutritionally at risk based on a nutrition assessment.

State Department: Department of Public Health and Environment

Eligibility: To participate in WIC you must be pregnant, pregnant in the last six months, breastfeeding a baby under 1 year of age, or a child under the age of 5. Coloradans do not need to be U.S. citizens to be eligible for WIC. In terms of income, households cannot have incomes that exceed 185% FPL. Families who are enrolled in SNAP, TANF, Food Distribution Program on Indian Reservations (FDPIR), or Medicaid are automatically eligible for WIC. Regardless of gender, any parents, foster parents, or caregivers are able to apply for and use WIC services for eligible children.

Program Benefits: WIC provides a range of services to young children and their parents. These include funds to purchase healthy, fresh foods; breastfeeding support; personalized nutrition education and shopping tips; and referrals to health care and other services participants may be eligible for.

Program Funding and Access: WIC is funded by the US Department of Agriculture. The state uses these federal funds to contract with local providers, known as WIC Clinics. In most cases, these are county public health agencies, but that is not the case in all Colorado counties. Some WIC Clinics cover multiple counties, while others are served by multiple clinics. Private non-profit providers are also eligible to be selected as a WIC Clinic.

Statewide Program Access 2015-17: Between 2015 and 2017, an average of 52.2% of the population eligible for WIC were enrolled in the program in Colorado.

Financial Security:
Colorado Works

Colorado Works is the name given to Colorado’s program for Temporary Assistance to Needy Families or TANF. It is an employment program that supports families with dependent children on their path to self-sufficiency. Participants can receive cash assistance, schooling, workforce development and skills training depending on the services available in their county.

State Department: Department of Human Services

Eligibility: In general, Coloradans are eligible to enroll in TANF if they are a resident of Colorado, have one or more children under the age of 18 or pregnant, and have very low or no income. For example, to be eligible to receive a basic cash assistance grant through TANF, a single-parent of one child could not earn more than $331 per month, with some exclusions—and would only receive $440 per month (as of 2022). That said, there are other services provided by counties through TANF that those with incomes as high as $75,000 may be eligible for. In addition to these, participants in TANF are required to work or be pursuing an eligible “work activity” or work-related activity. Any eligible individual can only receive assistance if they have not previously been enrolled in TANF for a cumulative amount of time of more than 60 months—this is a lifetime limit that does not reset. Counties may have additional requirements and offer benefits that are not available in other counties in Colorado.

Program Benefits:  While the exact benefits that one is eligible for under TANF can vary, all qualified participants are eligible to receive a monthly cash payment, call basic cash assistance. Other than cash assistance, counties are have a lot of choice in how to use their TANF funding; generally a use of TANF funds is appropriate so long as it advances one or more of the four purposes of the program: (1) provide assistance to needy families so that children can be cared for in their own homes or in the homes of their relatives; (2) end the dependence of needy families on government benefits by promoting job preparation, work, and marriage; (3) prevent and reduce the incidence of out-of-wedlock pregnancies; and (4) encourage the formation and maintenance of two-parent families.

It is important to note that those eligible for TANF are also eligible for many of the other programs we’ve included in this report, such as SNAP, Medicaid, and CCCAP.

Program Funding and Access: Colorado funds its TANF program through funds received from the federal government through the Temporary Assistance for Needy Families block grant. Most of the federal funds are allocated by the state to counties, which are required to provide a 20% match of state funding. Federal and state rules allow the state and counties to retain a portion of unspent funds in a TANF reserve.

Statewide Program Access 2015-19: Over the study period of this report, an average of 50.7% of the population at or below 100% of FPL (i.e., the population who is likely to be eligible for TANF) were enrolled in TANF in Colorado.

EARLY LEARNING:
COLORADO CHILD CARE ASSISTANCE PROGRAM (CCCAP)

The Colorado Child Care Assistance Program provides child care assistance to low-income families and caregivers living in Colorado in the form of reduced payments for child care. It is a program funded by the federal, state, and county governments and is administered by counties in Colorado. The share owed by parents/caregivers is determined on a sliding scale based on the family’s income.

State Department: Department of Early Childhood Education

Eligibility: Counties set eligibility for families separately, but must serve families with incomes at or below 185% of the Federal Poverty Limit. Families accepted to the program are no longer eligible once their income exceeds 85% of the state median income. Parents or caregivers must be employed, searching for work, or engaged in another approved activity to be eligible for CCCAP. Parents and caregivers enrolled in Colorado Works (Temporary Assistance to Needy Families or TANF) or in the child welfare system are also eligible to participate in CCCAP. Generally, CCCAP serves families with children under 13, although children as old as 19 may be eligible under certain circumstances.

Program Benefits: If a family is eligible for CCCAP and has income, they may likely have to pay a portion of their child’s or children’s child care costs each month. The amount that families owe is based on their gross income, number of household members, and the number of children in child care in the household. As such, households tend not to experience a benefit cliff with CCCAP when they see their incomes increase

Program Funding and Access: Colorado funds the CCCAP program using federal dollars it receives from the Child Care and Development Block Grant program. The state allocates federal and state funds to counties using a formula that takes into account factors like current caseloads and the number of eligible residents. Assistance is available until the county’s funds are spent, so the number of families that can be served is often a function of how much funding is available and the income and composition of the household that applies. It is not uncommon for counties to overspend or underspend their allocations of funds. The state reallocates unspent funds from counties who underspent to those who overspent. While underspending could indicate a problem with the way a county administers its CCCAP program, it could just as likely be a sign that there are few providers in the county who participate in CCCAP—or a lack of providers generally.

Statewide Program Access 2015-19: Over the study period of this report, an average of 10.8% of the population at or below 165% of FPL and younger than age 13 (i.e., the population who is likely to be eligible for CCCAP) were enrolled in CCCAP.

Housing:
HUD rental assistance programs

The US Department of Housing and Urban Development (HUD) has three housing assistance programs that we look at together: Housing Choice Vouchers (Section 8), Project-based Section 8, and Public Housing. In Colorado, these programs provided assistance to over 90% of the households who received federal housing assistance from all HUD programs. Through federally funded, local or regional public housing agencies (PHAs) are the agencies that administer these programs, through not all are available in all counties. These are not the only programs available in Colorado that assist households afford the cost of housing, such as units funded through federal and state tax credit programs.

State Department: Department of Local Affairs

Eligibility: Generally, households with incomes under 50% of the area median income (AMI) of the county they live in are eligible for these rental assistance programs, although PHAs have discretion to select households with incomes at higher percentages of AMI. That said, HUD requires that 75% of new vouchers issued through the Housing Choice Voucher/Section 8 program in a given year are targeted to households with incomes at or below 30% of AMI. PHAs are also able to create criteria that give priority to certain types of households who are on waiting lists for these programs.

Program Benefits: These rental assistance programs help households afford the cost of housing by reducing their housing costs to around 30% of their household income. In the case of the Housing Choice Voucher program, the PHA pays the voucher holder’s landlord the remaining portion of the rent.

Program Funding and Access: Funding and access are both challenges for these rental assistance programs. In addition to limitations on the number of public housing units or housing vouchers a PHA can manage or issue, lack of funding compared to the need constrains the ability of PHAs to assist low-income households. In 2020, Coloradans were on waitlists for Housing Choice Vouchers for an average of 17 months. Waitlists also exist for the other rental assistance programs.

Statewide Program Access 2015-19: Over the study period of this report, an average of 21.1% of renter households with incomes at or below 50% AMI (i.e., the population who is likely to be eligible for HUD rental assistance programs) were living in subsidized housing.