Do CARES Act Benefits Automatically Apply?

A consumer rights lawyer discusses how obtaining benefits required consumer action

By Amy White | Reviewed by Canaan Suitt, J.D. | Last updated on February 1, 2024 Featuring practical insights from contributing attorney Kristi Cahoon Kelly

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The Coronavirus Aid, Relief and Economic Security (CARES) Act was the first stimulus package that the U.S. federal government passed in response to the COVID-19 pandemic. The U.S. House of Representatives passed a Senate version of the bill, which President Donald Trump signed into law on March 27, 2020. The CARES Act would be followed by additional funding and measures under the Consolidated Appropriations Act in December 2020, and the American Rescue Plan Act, which Congress passed and President Joe Biden signed in March 2021.

In the first round of benefits under the CARES Act, consumer protection lawyer Kristi C. Kelly had a feeling she was about to be very busy.

“As a consumer protection lawyer, I have to constantly stay abreast of what is new and what is going on that affects consumers,” Kelly, an attorney at Kelly Guzzo in Fairfax, Virginia, says. “The CARES Act provided some very important consumer protections to individuals who had been impacted by COVID-19.”

Unemployment Benefits Under the CARES Act

The CARES Act provided several forms of relief to individuals who had been impacted by the pandemic, including:

  • Federal Pandemic Unemployment Assistance (PUA): Unemployment insurance with broader eligibility requirements, including anyone out of work due to the COVID-19 pandemic, including self-employed, contract, and gig workers;
  • Federal Pandemic Unemployment Compensation (FPUC): $600 per week for individuals already receiving unemployment benefits; and
  • Pandemic Emergency Unemployment Compensation (PEUC): Extra 13 weeks of unemployment benefits for those who had already exhausted their benefits.

The protections applied to individuals who suffered unemployment, reduced income, or any financial hardship due to the pandemic. However, Kelly said that months after the sweeping legislation passed, many people still didn’t understand their rights. 

“While the CARES Act has the potential to help millions of consumers, many parts of it were not automatic,” she says. “Individuals who got ill with COVID-19—or if a family member got ill or, god forbid, passed away—were focused on their illness, not finances. But [you had] to take affirmative action to obtain certain CARES Act protections.”

While the CARES Act has the potential to help millions of consumers, many parts of it were not automatic… [You had] to take affirmative action to obtain certain CARES Act protections.

Kristi Cahoon Kelly

What Action Was Required to Take Advantage of the Benefits?

For individuals who were struggling, Kelly suggested contacting creditors, such as:

  • Mortgage servicers;
  • Auto financiers; or
  • Credit card lenders.

“You just ask, ‘Can I have a CARES Act forbearance? I have a lot going on: I have a family member who’s sick, I got laid off, I am furloughed, my hours are reduced’—whatever it is, and you can get your payments into forbearance.”

If it sounds a little too simple, Kelly says it’s supposed to be.  “There has never been a better, or easier, time for consumers to get help from these types of lenders in efforts to save their home, keep their vehicles and avoid negative impact on their credit report that could last for years,” she says. 

Remember: Monitor Your Credit

For consumers who took advantage of benefits under the CARES Act, Kelly emphasized the importance of monitoring credit reports.  “The CARES Act was a massive piece of legislation that really sought to change the way things are done in a lot of different industries, so with that, there are some errors that might occur,” she says. 

For example, some people might be in forbearance and still reported as delinquent, and thus have negative credit ramifications. “Or someone in forbearance comes current but is still being reported in a negative fashion,” she says.

Ultimately, “I can’t stress enough how important it is to know your rights under this Act,” Kelly says. “The hope [behind the stimulus packages] is that by [pandemic’s end], consumers, by and large, can get back to a sense of normalcy instead of digging out of some very deep holes.”

If you have questions or concerns about your consumer rights, an experienced consumer lawyer can help. For more information related to this area of law, see our overview of consumer law.

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