JOINT BASE MCGUIRE-DIX-LAKEHURST, N.J. -- As the weather warms up and states begin to ease COVID-19 stay-at-home orders, citizens are returning to restaurants and shopping districts that make up an important part of the nation’s economy. But for many Reservists, it may take months before the economic impact of the pandemic fully thaws.
With unemployment claims jumping by more than 40 million since the pandemic began in the U.S., many people including military Reservists are reeling from a near total freeze in certain sectors like real estate, hospitality and brick-and-mortar retail.
Economists do not agree on when the economy will bounce back or how severe this downturn will be, but there are some bright spots on the horizon for Airmen needing financial assistance. In addition to short term relief through Congressional stimulus, Reservists and veteran homeowners may qualify for help with their Department of Veterans Affairs home loan payments.
Federal Programs
In March, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020, which provided direct payments to individuals and families, an extended unemployment insurance program and a blanket waiver of the 10% early withdrawal penalty for retirement account distributions up to $100,000 for Coronavirus-related purposes. A second round of stimulus is under consideration in Congress, which could provide an additional direct payment of $1,200 per individual sometime this year.
Additionally, the Treasury Department and Internal Revenue Service extended the tax filing deadline from April 15, 2020, to July 15, 2020. This measure could offer some much needed breathing room for individuals expecting to owe back taxes. The extension should not impact the payment of refunds, which are mostly being completed within 21 days, according to the IRS.
According to personal finance expert, Dave Ramesy, families struggling with difficult financial situations should use stimulus payments and tax refunds first for food and utilities, then pay the mortgage or rent.
Families having trouble paying their mortgage or rent are seeing some relief from the federal government, since the Department of Housing and Urban Development has extended an eviction and foreclosure moratorium through the end of June.
Veteran Benefits
Under the CARES Act, Reservists and military veterans who have home loans through the VA may be eligible for a payment forbearance due to a Coronavirus-related hardship. A forbearance is a temporary postponement or reduction in mortgage payments, but it is not payment forgiveness. The VA and personal finance experts recommend that borrowers who are able to continue making payments on mortgages should do so.
More information on forbearances for VA-guaranteed loans on the VA website.
Military OneSource
Experts like Dave Ramsey agree that even in times of financial hardship, individuals should still be buying life insurance to protect their families against the unexpected. Many Reservists participate in Servicemembers’ Group Life Insurance via direct payroll deduction every drill period, but may have missed premium payments if they have not performed military duty.
Military OneSource reports that Reservists who are unable to participate in drills during the pandemic will not be dropped from their SGLI policies and will maintain effective coverage. Similar to members who reschedule drills, missed SGLI premium payments will be deducted as a lump sum the next time the member returns to a pay status, according to Military OneSource.
During this difficult time of economic uncertainty, Reservists are encouraged to reach out to Military OneSource with their money questions. Financial counseling is available in-person or via telephone or video.