Unemployment claims are at unprecedented levels during the COVID-19 pandemic. Learn how this impacts UWECI’s five-county area.
In response to the COVID-19 pandemic, the federal government passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) in an attempt to help people and organizations combat the economic and health burdens brought on by the virus. About one quarter of the nearly $2 trillion effort is intended to be distributed to individuals in the form of direct cash payments called “economic impact payments”. With 58% of United Way of East Central Iowa’s (UWECI) five county region eligible for the full payment, rough estimates indicate that between $100 and $150 million could be recovered in our community.[i] More information on the economic impact payment can be found here.
This money is incredibly important at a time when unemployment claims are at unprecedented levels. Initial unemployment claims (the number of individuals filing an unemployment claim for the first time) throughout the U.S. and State of Iowa have been 30 to 35 times higher than average.[ii] During the first week of March, 206 individuals filed for unemployment in our five county region, which rapidly increased. One month later, during the first week of April, 8,721 individuals filed for unemployment. That is an increase of 4,133%.[iii] In total, 31,389 individuals have filed for unemployment in the past seven weeks. That is 19% of the five-county region’s labor force.[iv] It should be noted, as part of the CARES Act, some restrictions for unemployment qualifications have been loosened.
The important role of VITA:
Qualification to receive the economic impact payment is based on income from 2018 or 2019 tax filings. Further, the IRS is using the direct deposit information listed on those filings to distribute payments first. (Printed checks will be distributed later to those without available direct deposit information.) These factors add to the already long list of benefits Volunteer Income Tax Assistance (VITA) provides to the community. Between Linn and Jones County, this free service completed 2,409 returns for the 2018 tax year resulting in $4,044,078 in refunds.[v] Without the help of VITA over the past couple of years, many of these households may have had difficulty receiving their economic impact payment, may have had to wait weeks for a printed check to arrive in the mail, or worse, may not have received their payment at all. VITA volunteers were working incredibly hard at the beginning of this tax season and many filings were completed prior to the outbreak of COVID-19. However, to ensure the safety of the volunteers and community, appointments have been cancelled until further notice. More information about VITA can be found here.
With so many workers filing for unemployment, it is anticipated that between 9,700-29,000 individuals will lose health insurance sponsored by employers.[vi] Representatives from health and human services organizations around Linn County previously assisted community members through the enrollment process when Medicaid coverage was expanded and the Affordable Care Act (ACA) was initiated. That same group is primed to tackle the next challenge of increased uninsured individuals due to the outbreak of COVID-19. Searching for solutions to needed increases of Certified Application Counselors, translation resources, prescription assistance grant funding, and health care capacity are just a few of the tasks ahead. More will be required.
[i] U.S. Census Bureau. American Community Survey 5 Year Estimates. (2018). Tables S1901 & S0101.
[ii] U.S. Department of Labor. Unemployment Insurance Data. (2020). Seasonally Adjusted Initial Claims.
[iii] Iowa Workforce Development. Unemployment Insurance Statistics. (2020). Weekly County UI Claims.
[iv] U.S. Census Bureau. American Community Survey 5 Year Estimates. (2018). Table S2301.
[v] VITA is a free service for those with an annual income of less than $54,000.
[vi] Benson, Jess & Hicks, Luke. Legislative Services Agency & Unity Point Health. (2020). Community Planning for Increase in Uninsured Individuals/Families.