Coronavirus relief act 2.0 meets 3.0

APRIL 09, 2021


What the Second and Third Relief Package Has to Offer

Just days before the books closed last December on what may prove to be one of our country's most challenging years, former President Donald Trump signed legislation that provided a second round of financial relief to US citizens and businesses impacted by the pandemic.

The Fight for Round Two

Dubbed the CORONAVIRUS RESPONSE AND RELIEF SUPPLEMENTAL APPROPRIATIONS (CRRSAA) ACT OF 2021, the law allocated $900 billion of new funding across many sectors that politicians deemed in greatest need. Think of this legislation as round two of the CARES Act, which passed in March 2020. And as the new administration has promised, there will be another round coming.

Passage of this Act was not without issue.  You may remember the rancorous political stalemate among democratic and republican lawmakers throughout the fall of 2020. Much of that disagreement was not so much about the Act, but rather differing opinions about how monies would be spent in the more extensive (5,595 pages) $1.4 trillion omnibus spending bill of which this was a part.

What's Under 2.0's Hood?

Despite some claims that the legislation did not go far enough to help ailing workers and businesses, it did provide financial support across many struggling segments of the economy, including Individuals, small businesses, education, transportation, agriculture, healthcare, and several others.

For individuals and small businesses, help arrives in many forms.

Relief for Individuals

Direct Payments1: Any adult or child earning up to $75,000 receives a check of $600. Those making between $75,000 and $87,000 received a reduced amount, and those earning more than $87,000 did not receive any relief.

Unemployment Benefits2: The Act extended Pandemic Unemployment Assistance (PUA) payments of up to $300/week to March 14, 2021, for unemployed workers. Assistance wass also available to self-employed and gig workers.

Workshare Support3: Short-term compensation funding extended to March 14, 2021, for workers meeting the eligibility requirements for reduced working hours, enabling those individuals to receive partial unemployment benefits plus the $300/week federal subsidy benefit.

Rental assistance4: $25 billion was allocated to help individuals and families struggling to make rent payments. The Centers for Disease Control and Prevention expiration date for eviction moratoriums wass extended through January 31, 2021. Monies were allocated as follows:

  • Each state received at least $200 million.
  • Funds could be used to pay past-due or current rent, utilities, energy costs, and other expenses related to housing due to COVID-19.
  • Households meeting eligibility requirements could qualify for up to 12 months of support and, in some instances, an additional three months of assistance if funds are available.
Relief for Small Business

Paycheck Protection Program (PPP)5: The original PPP program introduced in the CARES Act had more than 5 million participants borrowing more than $500 billion in forgivable loans. The new Act clarified and corrected many of the confusing aspects of the first PPP program and extended additional loan opportunities for the most severely impacted businesses.

Round II

The new legislation allocated an additional $284 billion for the PPP program and earmarked $15 billion for non-profits, local media outlets, live venues, movie theaters, and cultural centers. This funding was not notable because it allowed small businesses to participate in the first round to apply for a second funding round. Companies applying for a second draw had to show a single quarterly reduction in gross receipts of at least 25% compared to the same quarter the previous year. The most a company could borrow was limited to 2.5 times the average monthly payroll or $2 million, whichever is lower. Like the previous PPP program, maximum forgiveness was tied to a company's ability to spend at least 60% on the payroll.

How Taxes Apply

The CARES Act provided that forgivable loans would not be viewed as taxable income but gave no clear explanation of how expenses would be treated. The new Act clarified this by stating expenses paid from PPP loans may be deducted.

Something for Everyone?

As mentioned, the new Act allocated funds across a broad swath of the US landscape, providing aid to the economy's industries and sectors alike. A few of the more notable included:


The Act set aside $82 billion for funding aid to schools and universities, which adds to the $30.75 billion former Secretary of Education Devoss shepherded through last year as part of the CARES Act. The new Act allowed for wide latitude on how the funds could be used and priority for many was to help comply with coronavirus safety protocols so they could open as soon as possible. Funds were distributed to:

  • Governor's Emergency Education Relief Fund II $4,053,060,000.
  • Elementary and Secondary School Emergency Relief Fund II $54,311,004,000.
  • Higher Education Emergency Relief Fund II $22,697,136,000.

Not directly tied to the Educational funding component of the Act but certainly related, $7 billion was earmarked to expand and improve broadband service that would help students and unemployed workers have the internet access they needed during this pandemic.

  • $15 billion went to passenger air carriers for payment to employees for wages, salaries, and benefits. $1 billion to aviation contractors.
  • $14 billion was set aside for mass transit agencies.
  • $10 billion of highways.
  • $1 billion for Amtrak.


The Act provided $68 billion to purchase and distribute COVID-19 vaccines and support state testing. $20 billion was allocated for vaccines to be made available at no cost for anyone needing them.8 

Also, relief was provided to physicians and other medical professionals by allowing a one-time, one year 3.75% increase in the Medicare Physician Fee Schedule.9

Nutrition and Agriculture
  • Agricultural producers, growers, and processors received $11.2 billion.
  • The Emergency Food Assistance Program received $400 million.
  • Milk and dairy processors received $400 million.
  • Meat and poultry producers received $60 million for facility upgrades.

Despite the size of the first two funding rounds, lawmakers on both sides of the aisle knew that additional relief would be needed, and soon.

3.0 To the Rescue

As soon as newly elected President Joe Biden assumed office, his administration moved at top speed putting forward to Congress a whopping $1.9 trillion relief package dubbed the American Rescue Plan Act of 202111 (2021 Act). While President Biden hoped for bipartisan support, the Democratic majority in the House and Senate ultimately passed the legislation without a single Republican vote, and Biden signed it into law on March 11, 2021.

You can find the final version of the nearly 600-page House and Senate-approved bill here, known as H.R. 1319.

This summary at, however, is much easier to digest and still reveals how far-reaching this government relief package will be

Specifically, the 2021 Act provides funding for

  • agriculture and nutrition programs, including the Supplemental Nutrition Assistance Program (SNAP, formerly known as the food stamp program);
  • schools and institutions of higher education;
  • childcare and programs for older Americans and their families;
  • COVID-19 vaccinations, testing, treatment, and prevention;
  • mental health and substance use disorder services;
  • emergency rental assistance, homeowner assistance, and other housing programs;
  • payments to state, local, tribal, and territorial governments for economic relief;
  • multiemployer pension plans;
  • small business assistance, including specific programs for restaurants and live venues;
  • programs for health care workers, transportation workers, federal employees, veterans, and other targeted people;
  • international and humanitarian responses;
  • tribal government services;
  • scientific research and development;
  • state, territorial, and tribal capital projects that enable work, education, and health monitoring in response to COVID-19; and
  • health care providers in rural areas.

The 2021 Act also includes provisions that

  • extend unemployment benefits and related services;
  • make up to $10,200 of 2020 unemployment compensation tax-free
  • make student loan forgiveness tax-free through 2025;
  • provide a maximum recovery rebate of $1,400 per eligible individual;
  • expand and otherwise modify certain tax credits, including the child tax credit and the earned income tax credit;
  • provide premium assistance for certain health insurance coverage; and
  • require coverage, without cost-sharing, of COVID-19 vaccines and treatments under Medicaid and the Children's Health Insurance Program (CHIP).
A Final Word

The truth is, there is no final word. If we have learned anything throughout this pandemic, change is constant, and the future is mostly unknown. Federal response to eradicate the virus and to sustain our fragile economy remains our greatest priority. The next phase of support confirms that commitment. The 3.0 phase of support confirms that commitment.


1. "Here Is What's In The COVID-19 Relief Package," NPR, December 2020

2. Ibid

3. "Consolidated Appropriations Act, 2021: Workshare Back in Play," John J. Porta, Jenna M. Decker, & Keerthi Sugumaran, January 2021

4. "$25B In Rent Relief Included in New Stimulus Package. Is It Enough To Help Renters At Risk of Eviction?," Kelly Anne Smith & Lisa Rowan, December 2020

5. "The Coronavirus Response and Relief Act -- WhatYou Need to Know About the Second Largest Stimulus Bill in History," Josh Gellar, Sarkis Haroutunian, & Kelly Raney, January 2021

6. "Coronavirus Response and Relief Act -- Elementary and Secondary Emergency School Relief Fund," Iown Department of Education, January 2021

7. "Here Is What's In The COVID-19 Relief Package," NPR, December 2020

8. Ibid.

9. "Federal COVID Relief Bill passed by Congress - December 2020," Jared B. Rifis, Kate M. Merrill, Kenneth A. Johnson, & Zane A. Hatahet

10. Ibid.

11. "What Is in the Third Covid-19 Stimulus Package?," Stephanie Stamm and Maureen Linke, March 2021


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Tom Hurley and Phil Wright are affiliated with Jackson. All other authors are not affiliated with Jackson.