Moral dilemma with new covid unemployment package

[Rianne]

All this brings up a question. Do the Govt. payments pay into SS and Medicare? DH is self employed and we pay 100% SS and Medicare. If this situation goes on for months is SS and Medicare getting funded somehow?

 

[Keim]

Yes. I would.

In answer to your final comment I'd argue: Who writes the check is immaterial when it all comes out of the same pocket.

 

[eroscott]

I'd strongly consider filing and use it to support your local community -- donations, eating out and leaving 100% tips, etc.

Eh... employees don't pay into unemployment... only employers pay unemployment tax. Were you thinking of something else?

Source: http://www.illinoislegalaid.org/index.cfm?fuseaction=home.dsp_content&contentID=2424

Unemployment benefits are paid indirectly by your old employer, through taxes. They're not paid directly from your employer to you, as some people think. But your benefits do come out of what employers pay in State taxes.
Employers care about their tax rate, which is based on how often their employees draw unemployment. They get to appeal unemployment claims to try to keep their tax rate low.
Employers pay a State unemployment tax on their payroll. Unlike Federal, State, and Social Security taxes, unemployment insurance taxes don't come out of your paycheck. The unemployment tax is paid entirely by the employer.
The unemployment taxes that all employers pay create the money pool that pays your benefits.

Source: http://www.bizfilings.com/toolkit/s...mployer-liability-for-unemployment-taxes.aspx

Employers must pay federal and state unemployment taxes in order to fund the unemployment tax system. Unemployment compensation is designed to pay benefits to workers when they lose their jobs through no fault of their own.
<snip>
Computing the tax. The FUTA tax is imposed at a single flat rate on the first $7,000 of wages that you pay each employee. Once an employee's wages for the calendar year exceed $7,000, you have no further FUTA liability for that employee for the year.
The FUTA tax rate is 6 percent. That is the tax rate that applies to the first $7,000 in wages paid to each of your employees during the year.

 

[SpinDoctorTX]

I agree with those who think you should take it. We intend to spend our stimulus $ at small businesses in our area, and donate most to the Houston Food Bank. Normally I'd volunteer there (the food bank, not the businesses!), but that option is sure off of the table.

Thing is, we don't need to buy anything much, and if we ate out all of the time we'd definitely gain a bunch of weight.

 

[zippy2020]

I like the idea of donating it.

We're getting the bonus check as a couple, but don't need it. Sure, we could use it for a new DW (much needed) or to put towards our foundation work (also much needed). But frankly, those are costs we can cover by ourselves by just putting some extra $$$ away....you know, the stuff we're not spending because we're not traveling, even to see family members 10 miles away.

We have a self-employed friend who is fighting a recurrence of Stage 4 breast cancer. She has been unable to work for two months and is still in pain; probably won't work again for another 3-4 weeks (and that's assuming the state lockdown ends, which it probably won't).

We believe she needs it a whole lot more than we do. Even with her own (single) bonus check and unemployment - normally she wouldn't qualify, except for the new temporary guidelines - she's living on the edge.

We've known her for 15 years. She's a prime example of why the profile of American poverty is a divorced single woman.

 

[devans0]

Get the money, spend it or donate it to someone who needs it and will spend it. Consumer spending is what will keep the economy going and recharge the economy too. Those profits will in turn allow others to be paid, and pay taxes. After several iterations, the Government is making the money back, and the economy gets revitalized.

But I donate to any and all decent charities. And I have a FIRE.

 

[trumpeting_angel]

I have a similar dilemma. I retired 6/19, and this winter took a job in a ski shop helping out on weekends. The job ended suddenly, a couple months early. I applied for UI, expecting them to offer about $19.99/week, given my 12-hour weekly schedule and slim wages. And I began interviewing for a professional position (remote).

I received word that my claim was approved, and it is based on my previous professional salary from 2019, not the pittance I earned at the ski shop. I was working half time last year before retiring. With the Federal subsidy, my check will be $1,000+/week.

Suddenly I don’t want to go back to professional work. My plan had been to take another tiny job with some perks (I had my eye on a job that would give me access to a gym and ski area, free).

I took the same hit we all did in the market. I own a rental property and if I don’t qualify for that SBA grant that will be another major hit. I have two years’ expenses in cash.

This thread has been useful. I will certainly be spending that money, to take some time to let the financial wounds heal, and try to spread out that cash over 3.5 years when I will take SS. but I won’t return to work that I decided I was tired of and less productive in last year.

 

[gayl]

I'm not opposed to enhanced unemployment for government-ordered shutdowns, but it should be capped at your existing wage.

[emoji106]

 

[tomc5179]

I believe the intention for these funds are two fold. Stimulate the economy and also to help people get by. To me, the morally "wrong" thing to do would be to add it to existing savings if a person is already in a good financial position. I'm already retired, so I won't be receiving enhanced unemployment, but I will accept the stimulus funds and spend them as I normally would with local business in order to help them.

 

[Independent]

Yes, they are paying $15/hour on top of what you would have received under normal unemployment rules. Wonder where that number came from?

I've read that they said the median weekly wage in the US is about $1,000 and the median unemployment benefit is about $400. The $600 is the difference.

They didn't want a more complicated formula because they wanted something fast. Also, some states are more generous with UE benefits than others. If they had said the federal gov't will pay enough to get the total up to x% of regular wages, they would have given more federal money (aka "reward") states that have lower benefits.

I also noticed that $600/wk = $15/hr.

 

[Tiger8693]

I like to live my life with integrity so definitely would not take it.

Has nothing to do with integrity or lack thereof. They both may have financial problems in the future where this money, put away, could help them. If not, it can be donated.

 

[Chuckanut]

Given the current political crowd in D.C., the money will be spent, if not by you them by the politicians. Who do you think will spend it more wisely?

One thing for certain, if you don't get the money, it sure won't be put towards reducing the National Debt.

 

[eroscott]

Donated to a couple of food banks in my area last night. There are some brutal news articles, pictures, and videos in various parts of the USA.

Found one via: https://www.feedingamerica.org/find-your-local-foodbank