What To Do With a Loss of Income Options
There are many reasons you can experience a sudden loss of income. Sometimes there are foreseen circumstances that can lead to reduced hours at your job, such as needing to work less to support the birth of a new child.
In this article, we will be covering three different circumstances where you may be experiencing a loss of income. For each circumstance, we will outline income options that might be helpful in your time of need.
Income Options
- Loss of Income Due to Reduced Hours
- Loss of Income Due to Unemployment
- Not Qualified for Unemployment
In the case of COVID-19, California Coast recognizes that the outbreak brought unforeseen financial hardship to many. Whether related to the pandemic or not, our hearts go out to those affected. We hope the following tips and resources will assist those who are navigating their way through financial troubles and help with the exploration of other income options.
1. Loss of Income Due to Reduced Hours
You may find yourself with reduced income or loss of income for a variety of reasons. In the case of the COVID-19 pandemic, companies closed their doors to protect their employees and their communities from an outbreak.
If you are still working but getting fewer hours, first take a look at your paystub. What changes can you make?
- Can you change your tax withholdings to exempt?
- Can you cash out a portion or all of your vacation hours or sick leave?
Do you pay 401k contributions or do you have a 401k loan?
You may be able to suspend your 401k contributions temporarily. If you have a 401k loan, you may be able to defer your payments.
You also may be able to withdraw from your 401k without penalty if you meet certain criteria. In the case of COVID-19, these criteria include being quarantined, being laid off, hours reduced, furloughed, childcare changes, or if you or spouse has been diagnosed with the COVID-19 virus. Read the irs.gov article on Hardships, Early Withdrawals and Loans to find more information on certain events that qualify you for a withdrawal without penalty.
Do you have flexible spending accounts?
Use those for any additional medical expenses. As in the case of the pandemic, FSAs may have different rules that expand authorized expenses to include over-the-counter medicines such as Tylenol, Aleve, cough medicines, and pain relief.
Are you paying for life insurance?
How much is your life insurance coverage? Can you get more for less through outside company?
What about other expenses like parking or Legal Aid?
If you are paying for anything extra, ask yourself if you can suspend or cancel those services. Every little bit will count.
2. Loss of Income Due to Unemployment
If you were laid off, let’s take a look at unemployment. You’ll want to make sure you meet all the eligibility requirements when applying and certifying for benefits.
In order to apply for unemployment in the state of California, you must:
- Have earned enough wages during the base period.
- Be totally or partially unemployed.
- Be unemployed through no fault of your own.
- Be physically able to work.
- Be available for work.
- Be ready and willing to accept work immediately.
More information on California’s unemployment eligibility requirements can be found here. Typically, the rules state that you must be unemployed through no fault of your own. However, you may be able to prove that you had good cause for quitting with the approval of your employer.
In some rare cases, unemployment requirements may change altogether. For example, the eligibility requirements changed during the COVID-19 pandemic so that you could apply even if you were:
- Self-employed
- Seeking part time employment
- Did not have enough work history to qualify before.
The qualifications:
- You or family member have been diagnosed with COVID-19.
- You provide care for sick person or for your child for whom school was closed.
- You are in quarantine.
- You are unable to reach your job or your job was closed due to COVID-19.
- Your spouse who earned the main income died from COVID-19.
It is important to consider all of your income options, including unemployment. Keep up-to--date on the rules and requirements for benefits like unemployment, since they may have changed due to extenuating circumstance. You may qualify for benefits when you otherwise would not have.
3. Not Qualified for Unemployment
If you do not have a job and do not qualify for unemployment benefits, there may be other income options for you to explore. Companies often increase staffing to support increased workload when demand is high due to certain circumstances.
Some alternative income options you might want to explore are:
- Grocery and open stores such as Target and Wal-Mart
- Drug stores such as Walgreens and CVS
- Amazon and other online shopping stores such as Instacart
- Outschool for teachers
- Zoom and other online social connection companies
There are also increased opportunities in the community. Can you help seniors with their shopping? Offer home cleaning services.
If you search for options, you may find something that will help get you through this rough patch. Need more guidance? Cal Coast’s Certified Financial Coaches are always here to offer members one-on-one financial support and advice. You can also visit our Financial Tips blog for more advice on budgeting, financial planning, and more.
DISCLAIMER: The tips provided are for informational purposes only and in no way should be relied upon for financial, tax, or legal advice. The information is subject to change without notice. California Coast Credit Union encourages you to do your own due diligence when making decisions regarding your financial management.
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