First, the good news: For the first time ever, Unemployment Insurance (UI) is now available to self employed people until the end of the year (12/31/20)! This means that farm owners who have seen a dramatic loss of income due to COVID-19 can now apply for UI benefits. This is only available now through a provision of the CARES Act, the national COVID-19 relief package passed and signed into law on March 27th. If COVID-19 closures and cancellations have harmed your farm business, take advantage of this opportunity to keep yourself and your farm afloat through this pandemic.
Now, the not-so-good news: This is a complicated and evolving situation. This information was current at the time of publication (4/17/2020), yet changes could be made to the programs since then. We will do our best to keep this post current.
Farm and ranch businesses are specifically cited in the CARES Act as eligible for the expansion of UI benefits. To qualify as a self-employed person, you must:
- Have your primary income from self-employment
- Self-certify that you are unemployed from your self-employment
This new eligibility for UI benefits is only for people who are unemployed, or for farmers who have seen a drastic loss of revenue due to the COVID-19 pandemic. This is important because during the application process, applicants have to explain why the loss was due to COVID-19 specifically, and not caused by other market factors. For example:
- Your farm lost all your restaurant customers and cannot continue normal operations
- The restaurant closures are a direct result of COVID-19, so this loss of income would make you eligible
- You will have to report the income from other mechanisms (online stores, CSA, etc)
- Meat processing facilities can’t take your animals because they have closed due to illness (in their staff for example):
- When you eventually are able to bring these animals to the processor, you will have to report that income so it might be a wash in the end.
- Your milk has been rejected by the processor because they have a glut of milk at the moment:
- You can make the argument that this is directly a result of COVID-19 because of the loss of restaurant and institutional markets (schools, workplace cafeterias, etc.).
- BUT—COVID-19 has to be the direct reason, it cannot precipitate or exacerbate an existing problem in a collapsing market. There have been reports of push back on this point for dairy and commodity crop farms where markets have seen declines in the recent past for other reasons. This doesn’t mean you will be denied, but it does mean you may have to advocate for yourself more in the application process.
How much money can you receive in UI benefits?
UI benefits are calculated either as a percentage of your previous income or as a percentage of the state’s mean income, whichever is greater. The Oregon Employment Department has a benefit calculator tool that will give you an idea of what to expect based on your circumstance. Keep in mind that any income you are still receiving (other farm sales outlets, social security, etc.) could reduce the amount of your benefits.
From now until 6/31/2020, there is an additional $600 per week available from the federal government. This is on top of the state calculated payment and is also funded through the CARES Act. After this boost in federal funding ends on 6/31, self-employed people can still receive UI benefits until the end of 2020, but only the state funded portion discussed above.
Oregonians can file a claim for UI benefits online on the Employment Department website. You will need information about your income for the last 5 quarters, and to qualify for UI as a self-employed person you need to make the case that your unemployment is due directly to COVID-19.
The CARES Act is so new, state employees may not all be up to speed. If a case worker or someone from the Employment Department says that you cannot receive UI benefits because you are self employed, reference the following:
- The CARES Act extended UI to workers who are “otherwise able to work and available for work within the meaning of applicable State law, except the individual is unemployed, partially unemployed, or unable or unavailable to work because” of one of the 11 listed reasons. Farmers fall into the last reason, section kk. See Section 2102(a)(3)(A)(ii)(1)(aa)-(kk).
- Page I-3 of the Advisory: Unemployment Insurance Program Letter No. 16- 20 that the U.S. Department of Labor issued to state departments of labor on April 5: “Self-employed individuals” as defined in 20 C.F.R 625.2(n) means individuals whose primary reliance for income is on the performance of services in the individual’s own business, or on the individual’s own farm
- You can reference this memo from Farm Commons for more information on the specific legal backing of this change.
If you feel that you are wrongly denied UI benefits given the new information and circumstances, you can appeal that determination using the process outlined here.
Where can I get more information?
For more information and some specifics on which parts of the CARES Act you need to reference for your UI claim watch this webinar from Farm Commons.
You can also get help from the state using their UI Help Center on the Unemployment Resources page. Keep in mind that call volume is exceptionally high at the moment and you may be better off emailing a question if you have one.
Unemployment Insurance FAQs
- If I have a spouse or other household member with an off-farm job, can I still qualify?
- YES, this is based on your personal primary income, not the household’s.
- If my spouse and I are both working our farm/ranch as our primary source of income, can we both apply?
- YES, if you are both owners of the farm and you report your income together, it is recommended that you split that income in half and each apply separately.
- What if the farm posted a loss on taxes last year?
- You can still apply and receive benefits! Go ahead and give it a shot.
- Can this be used in combination with PPP?
- No. If you are using PPP (Paycheck Protection Program, another COVID-19 relief fund), you cannot also file for unemployment because the PPP funds are keeping you employed.
- If you have already let your employees go, you can re-hire them using PPP funds, but they would have to report this as income, which may disqualify them from receiving UI benefits.
- What other income do I need to report to UI case workers?
- You need to report all additional income from the farm (if you are adapting your business practices, this might mean your UI benefits go down as your income from other sources goes up)
- You need to report any and all other payments you receive, including: social security benefits, military pension funds, any other entitlement payments
- Is UI taxable income?
- YES, you will have to report and pay taxes on UI income for your 2020 tax filing. You can set up withholding when your claim is approved.
This is one of the tools available to farmers now to get through this difficult time. It should be taken into consideration when deciding which of the various types of government assistance are helpful or necessary to keep your farm going during COVID-19.