Financial Assistance

In the wake of employment disruptions since the beginning of March, public and private assistance helped fill the gap between income and expenses for many families. Nearly one-fourth of adults reported that they, or their spouse or partner, received assistance from unemployment insurance, SNAP, or free groceries or meals from charitable organizations since the start of the pandemic. This includes 11 percent who received unemployment insurance and 10 percent who received SNAP benefits (figure 7). Additionally, 5 percent of adults received financial assistance from family outside their household or from a religious or community group. A small share of adults reported they had applied for one of these benefits but not received them, and this was most common for unemployment insurance.

Figure 7. Forms of assistance received and requested
Figure 7. Forms of assistance received and requested
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Note: Key identifies bars in order from top to bottom.

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provided enhanced unemployment insurance benefits of $600 per week, which supplemented normal unemployment insurance benefits.7 Reflecting these additional benefits, 40 percent of unemployment insurance recipients said that the benefits they received were larger than their previous wages while working, and 23 percent said they were about the same. Adults in low-income families were more likely to say that the unemployment insurance benefits were greater than their prior earnings (figure 8).

Figure 8. Unemployment insurance benefits relative to pre-layoff wages (by family income)
Figure 8. Unemployment insurance benefits relative to pre-layoff wages (by family income)
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Note: Among those who received unemployment insurance. Income categories are from the October 2019 survey responses. Key identifies bars in order from top to bottom.

Changes in both employment and financial assistance affected household income as a whole. Most people did not experience an employment disruption, and most said that their income was unchanged from before the pandemic. However, 23 percent of all adults said their income in June was below that in February, whereas 11 percent said it was higher.8

The likelihood of experiencing an increase or decrease in income varies based on employment disruptions as well as the receipt of unemployment insurance benefits.9 Half of the people who lost a job or had their hours cut, but were working at the time of the survey, said that their June income was lower than before the pandemic. Similarly, 47 percent of those not working who received unemployment insurance reported an income decline. However, among those not working who did not receive unemployment insurance, 71 percent said that their income went down (figure 9).

Figure 9. June 2020 income relative to February 2020 (by employment disruption and unemployment insurance benefits receipt)
Figure 9. June 2020 income relative to February 2020 (by employment disruption and unemployment insurance benefits receipt)
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Note: Key identifies bars in order from top to bottom.

On the other hand, those who had received unemployment insurance benefits were more likely to say their income was higher, reflecting the enhanced benefits in effect at the time. Twenty-eight percent of people who received unemployment benefits said that their June income was above that in February. This compares to 10 percent of those who had no employment disruption whose income increased.

Some families also received housing payment relief due to the effects of COVID-19, which further alleviated potential financial hardships. Five percent of both renters and homeowners with a mortgage received a housing payment reduction or deferral (figure 10). An additional 3 percent of renters, and 1 percent of homeowners with a mortgage, requested assistance with rent or mortgage payments but did not receive it.

Figure 10. Received or requested assistance on housing payments (by homeownership status)
Figure 10. Received or requested assistance on housing payments (by homeownership status)
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Note: Among renters and homeowners with a mortgage. Key identifies bars in order from top to bottom.

Among those receiving relief, there was some concern about restarting payments once the relief ends. Just under half of people receiving housing relief were moderately or very confident that they would be able to resume their monthly payments and make up any deferred payments. However, 32 percent were just slightly confident that they would be able to resume their payments, and 19 percent were not at all confident that they would be able to do so.

In addition to the relief received on housing payments, 12 percent of all adults received assistance with other bills. This appears to reflect high rates of student loan deferrals. Thirty-five percent of people who had outstanding student loan debt from their own education in the fall reported receiving payment relief on at least one non-housing bill, compared to 8 percent of those without student loan debt.

Some adults tapped their own savings to cover financial shortfalls in recent months. This includes those who borrowed or withdrew funds from retirement accounts. The CARES Act relaxed some of the restrictions and penalties for savers to tap retirement plan assets, provided they experienced a qualifying hardship due to COVID-19.10

Adults who experienced employment disruptions were more likely to have borrowed from or cashed out retirement savings accounts (figure 11).11 Fifteen percent of non-retirees who were laid off or had their hours reduced since March said they had tapped retirement assets in the past 12 months, compared to 7 percent of non-retirees who had not experienced an employment disruption. Nevertheless, the overall share of non-retirees who reported they have borrowed from or cashed out accounts was unchanged in July relative to the fall of 2019, remaining at 9 percent.

Figure 11. Borrowed from or cashed out retirement savings accounts in the past 12 months (by employment disruption)
Figure 11. Borrowed from or cashed out retirement savings accounts in the past 12 months (by employment disruption)
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Note: Among non-retirees.

Footnotes

 7. For details on the unemployment insurance benefit changes in the CARES Act, see "Unemployment Insurance Relief during COVID-19 Outbreak," U.S. Department of Labor, 2020, https://www.dol.gov/coronavirus/unemployment-insuranceReturn to text

 8. Some of this volatility may reflect regular changes in income that occur from month to month. For a description of income variability from survey measures, see Jeff Larrimore, Maximilian Schmeiser, and Sebastian Devlin-Foltz, "Should You Trust Things You Hear Online? Comparing SHED and Census Bureau Survey Results," Finance and Economic Discussion Series Notes (Washington: Board of Governors of the Federal Reserve System, October 15, 2015), https://www.federalreserve.gov/econresdata/notes/feds-notes/2015/comparing-shed-and-census-bureau-survey-results-20151015.html. For patterns of income volatility in bank account data, see Diana Farrell, Fiona Grieg, and Chenxi Yu, Weathering Volatility 2.0: A Monthly Stress Test to Guide Savings (New York: JPMorgan Chase Institute, 2019), https://institute.jpmorganchase.com/institute/research/household-income-spending/report-weathering-volatility-2-a-monthly-stress-test-to-guide-savingReturn to text

 9. The employment question in the survey asks about the respondent's own employment, whereas the income and unemployment insurance benefits include benefits for the respondent's spouse or partner as well. Consequently, some respondents may report income changes due to employment disruptions among family members, even if they did not personally experience an employment disruption. Return to text

 10. "Coronavirus-Related Relief for Retirement Plans and IRAs Questions and Answers," Internal Revenue Service, last updated July 30, 2020, https://www.irs.gov/newsroom/coronavirus-related-relief-for-retirement-plans-and-iras-questions-and-answersReturn to text

 11. The question does not specify whether retirement savings accounts were tax-preferred (such as 401(k) plans) or taxable accounts, so respondents may have included withdrawals from a range of different types of accounts, not just those covered by the CARES Act provisions. Return to text

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Last Update: September 23, 2020