ELLSWORTH — Once they acknowledged that the current coronavirus pandemic, in addition to its public health consequences, would cause an economic disaster, Congress and the administration in Washington, D.C., established a $2.2-trillion economic relief program. The program was designed to put money in the pockets of millions of newly unemployed workers and to help thousands of small businesses keep workers on the payroll.
While the federal programs are designed to provide substantial aid, so far they have done little to help the thousands of entrepreneurial Maine fishermen who are self-employed and don’t qualify for ordinary unemployment insurance benefits. It is an open question when any help will be forthcoming.
“The state of Maine continues to await guidance from the federal government on guidelines to expand unemployment to self-employed persons,” Patrice McCarron, executive director of the Maine Lobstermen’s Association, said Friday. “The only source of info is the state. They continue to tell self-employed not to file because the application will result in denial since the program is not set up.”
On March 27, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act that, among other provisions, authorized one-time “economic impact payments” of $1,200 to adult U.S. residents with incomes of under $99,000 plus an additional payment of $500 for each child in a household. According to the U.S. Treasury, the first payments were issued last week. Some payments were to be transferred by direct deposit into taxpayers’ bank accounts, but as of Monday many people were still waiting for the money to appear.
The CARES Act also established the Paycheck Protection Program to provide $349 billion in loans to businesses affected by the coronavirus shutdowns. The loans, targeting small businesses, including sole proprietors, would be forgiven to the extent that loan proceeds were used to continue to pay employee wages. Fishermen were eligible to apply for those loans as well as loans under the Economic Injury Disaster Loan program, but many did not realize that was the case.
Last Thursday, the federal Small Business Administration announced that funds for both the Paycheck Protection Program and Economic Injury Disaster Loan program authorized by Congress had been exhausted and that no more loan applications would be accepted.
“Due to unclear guidance, many fishermen were initially told by their lenders they were not eligible for the Paycheck Protection Program,” lobster fisherman and state Rep. Genevieve McDonald (D-Stonington) said Monday.
According to McDonald, the application process for the Paycheck Protection Program for sole proprietors did not open until April 10, and by April 16 lenders had stopped accepting applications for either loan program.
“Of those who did apply, many have not received a response,” McDonald said. “We need Congress to authorize additional funding for the Paycheck Protection Program and the Economic Injury Disaster Loan and the Maine Department of Labor to implement expanded unemployment insurance.”
McDonald also called on the National Oceanic and Atmospheric Administration to release to state governments $300 million in fisheries disaster relief funds authorized specifically to help the nation’s fisheries under the CARES Act.
Economic Injury Disaster loans for fishermen were also available, briefly, through the Small Business Administration and some loans were available through the Finance Authority of Maine (FAME).
According to its website, FAME has set aside $5 million in funding for its COVID-19 Relief Business Direct Loan Program but, by April 2, the agency had received requests exceeding $5 million though not all of those applications are likely to be approved.
“You are still welcome to apply for this program, but please know that we may not be able to fund your request,” according to the agency’s website.
Beyond the one-time payments and the loan program, Congress also authorized a program of supplemental unemployment insurance benefits of $600 per week to continue at least into the summer. Those payments began rolling out last week, but according to Jessica Picard, communications director at the Maine Department of Labor, there are still many uncertainties about the how the federal programs will work.
In an email last Friday, Picard said the department received its first federal guidance on how to administer the supplemental Pandemic Unemployment Compensation program on April 5. After completing a “rigorous process” involving software development and testing, the department sent out the first $54 million in additional benefits in the form of direct deposits to banks last Thursday night.
Next up for DOL is establishment of the Pandemic Unemployment Assistance coverage for self-employed and others not normally covered by unemployment insurance. According to Picard, the department was still waiting for guidance from the U.S. Department of Labor as to what information the self-employed would need to qualify for the program’s benefits under federal law.
To prepare for the forthcoming program, Picard said, self-employed individuals should gather several federal tax forms likely necessary to file applications including their 2019 federal tax return (Form 1040) together with: Schedule C for sole proprietors; Schedule J for farmers and fishermen; Schedule SE- Self-employment; and Schedule K-1 for Partnerships and S-corporations.
The CARES Act also established a third unemployment compensation program that will provide up to 13 extra weeks of benefits beyond the usual 26-week maximum, but DOL has just begun the process needed to put that program in place.