A cornucopia of people across the globe is still fighting the aftermath of the pandemic. Not only has it crippled us physically, but it has also taken away a lot of our jobs.
- Stimulus checks are one-time payments the government provides to support economic recovery, while unemployment benefits offer ongoing financial assistance to eligible individuals.
- Stimulus checks apply to a broader population, whereas unemployment benefits target those who have lost their jobs.
- Unemployment benefits require a qualifying process, while stimulus checks are distributed automatically based on income levels and tax records.
Stimulus Check vs Unemployment Benefits
A stimulus check is a one-time pay from the government to eligible individuals to help stimulate the economy and provide financial relief during times of crisis. Unemployment benefits are continuous payments to individuals who have lost their jobs by no fault of their own and are seeking employment.
The aftermath of the pandemic was so devastating that the Biden-led Government considered it befitting to introduce this one-time financial aid to ameliorate the plight of the unemployed and their family members.
Unemployment Benefits, or as it is now introduced under the CARES ACT- Enhanced Unemployment Benefit, comprises of two programs that are aimed at better the financial predicament of those who were laid off or were self-employed but lost their source of income due to the havoc that was unleashed by COVID-19.
|Parameters of Comparison||Stimulus Check||Unemployment Benefits|
|Description||Financial aid will be extended to an unemployed person and his family on a one-time basis.||It is a benefit that will be provided to those laid off or self-employed.|
|Eligibility||One should have a Social Security Number and must submit their federal tax return.||Those who have been laid off or were self-employed but lost their source of income due to the pandemic qualify|
|Nature||This one-time financial aid scheme is extended to an unemployed person and his children.||This financial aid is extended to those who are unemployed weekly.|
|Taxable||This is not taxable income||This is taxable income; one can either withhold taxes upfront or pay it when filing their returns.|
|Provided To||A certain sum is allocated for every individual in the family.||The amount is given to the individual.|
What is Stimulus Check?
2020 gave us a peek into what a dystopian world would feel like. Not only did it take a few of our loved ones away from us, but it did cost millions of people their jobs across the globe.
The stimulus check is a package that was made available to American households with no employment by virtue of the aforementioned Act.
Stimulus Check is a one-time financial aid that is extended to unemployed people and their family members. One will be eligible under this scheme only after he meets the espoused requirements.
What are Unemployment Benefits?
Introduced under the same Act as Stimulus Check, this too is an initiative led by the incumbent Democrats.
The two programs are- the CARES Act and the Pandemic Emergency Unemployment Compensation Program (PEUC Program). The former-mentioned program aims to provide people laid off from their W-2 jobs a weekly benefit of a certain sum that will ensure that the person can at least buy the essential commodities.
While the State unemployment benefits were to end in 26 weeks, the benefits under the CARES Act added 13 more weeks to this program. This is taxable income; one can either withhold taxes upfront or pay them when filing their returns.
Main Differences Between Stimulus Checks and Unemployment Benefits
- The amount that is received from the Stimulus Check will not be taxed. In contrast, the amount received from the Unemployment Benefit is taxable, and one can either withhold taxes upfront or pay it when filing their returns.
- While the Stimulus Check is more beneficial to those with disabilities or ones who receive a pension, the Unemployment Benefit has no such reservations.
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Chara Yadav holds MBA in Finance. Her goal is to simplify finance-related topics. She has worked in finance for about 25 years. She has held multiple finance and banking classes for business schools and communities. Read more at her bio page.