Understand These Financial Terms Related to COVID-19
Americans are continuing to adjust to ongoing effects of the COVID-19 pandemic. We are collectively watching and reading more news, which means we are hearing and seeing a number of terms that may be unfamiliar. In addition to medical jargon, there’s also a lot of talk about employment and finances. We wanted to provide a glossary of these terms to help make sure you understand key information that may directly affect you.
Deferment or Deferred Payments
Many creditors are offering customers impacted by COVID-19 payment deferments of one month or more. Typically, this means that no minimum payment is due until the next billing cycle. In some cases, creditors are also stopping interest from accruing during the deferment period. Find a list of creditors contact information and available assistance here.
A furlough is a temporary layoff from work. In most cases, furloughed employees will return to work once businesses are back up and running. During a furlough, employees don’t receive regular paychecks, but are eligible to continue receiving employer-provided benefits, such as healthcare.
When employees are laid off, it means they are permanently dismissed. They no longer receive pay or benefits from the company. In most cases, laid off employees are eligible to file for state unemployment benefits. Read more about the enhanced unemployment benefits for those affected by COVID-19 layoffs.
Payroll Tax Cut
As lawmakers begin discussing additional ways to offer financial relief, you may hear more talk of a payroll tax cut. If passed, a tax cut would reduce the amount of taxes collected from each paycheck, leaving you with more take-home pay each pay period. It won’t have the immediate impact on your finances the way the stimulus payment will, but it’s one more way to put a little money back into consumers’ hands.
Small Business Administration or SBA
The Small Business Administration was created in 1953 to help Americans start, build and grow businesses. During the pandemic they are offering loans, debt relief and other services to business owners affected by COVID-19. Learn more about the programs they’re offering.
During times of economic hardship, the federal government will sometimes send cash payments to taxpayers to help them pay for goods and services and inject funds back into the economy. The recent CARES Act calls for almost all American adults and their dependent children to receive stimulus payments in response to the pandemic. Before now, the last time the government sent out stimulus payments was during the Great Recession. Read more about how to make the most of your stimulus payment when it arrives.
Please read the message from our CEO for information on how Take Charge America can help you during this time.
Visit cdc.gov for additional and guidance regarding COVID-19.