The Federal Government Directs Extensive Relief Benefits, but with Room to Improve

• Author: Monica Jackson
• Posted: 2024-09-18

In the face of a disaster, the federal government works with states and local areas in directing relief efforts. On many occasions, states, territories, and Native tribes are responsible for small-scale disasters. However, when the scale of the disaster is large enough, the federal government steps in.

The Federal Emergency Management Agency (FEMA) responds to the requests for support from the various state and local authorities. The first step usually involves a governor making a formal request for help and then the President declaring a national disaster. FEMA organizes a variety of responses through a Federal Coordinating Officer (FCO) and a Federal Disaster Recovery Coordinator (FDRC). The federal government then works with states and local areas to provide short and long-term relief benefits.
 

Federal Disaster Relief Benefits through Tax Breaks, Loans, and Direct Assistance

The primary form of federal disaster relief assistance is with the Disaster Assistance and Emergency Relief Program. This program is available to both individuals and businesses impacted by a disaster in a federally declared area. The main provisions come from tax deductions that help those affected recover financially.

Through the Disaster Assistance and Emergency Relief Program, individuals or businesses in a federally declared disaster area can deduct damages and losses from their tax returns. This relief can be secured either on the return in the year the disaster occurred, or through an amended return for the year before the disaster happened. The Internal Revenue Service may also allow additional time to file a return or pay taxes.

Businesses that reside in a declared disaster area are also eligible for federal loans. The Business Physical Disaster Loans provides loans to businesses and nonprofit organizations if they have physical damage from a disaster. An application needs to be submitted to the Small Business Administration (SBA) and approval is based on an expectation of that the business or organization will be able to repay the loan.

The federal government also provides direct assistance to those impacted by natural disasters. For example, the 2017 Wildfires and Hurricanes Indemnity Program (2017 WHIP) provides aid to those who suffered a loss because of the 2017 hurricane. Likewise, agricultural losses due to 2017 wildfires and related effects such as mudslides can qualify for direct assistance through this program.

The WHIP payment ranges from 65 percent to 95 percent, and those receiving benefits are subject to limits of either $125,000 or $900,000, based on adjusted gross income.
 

Unemployment, Food, Utility, and Mortgage Assistance

Through the Disaster Unemployment Assistance program, the federal government also provides direct aid for those who have lost a job due to a disaster. The main requirement is that a person's employment has been interrupted, or a job completely lost, due to a presidentially declared disaster.

This unemployment program does go through the states. For example, in California people and businesses impacted by a disaster would need to go through the Employment Development Department (EDD) to receive aid.

The Disaster Supplemental Nutrition Assistance Program is also available to help with food support. The D-SNAP program provides one month of benefits to help with food following disaster situations. Similarly, the Low Incomes Home Energy Assistance Program (LIHEAP) helps with paying utility bills or repair air conditioning units.

Moreover, the government provides help to homeowners through the Mortgage Insurance for Disaster Victims program. As the name implies, this program provides support to people in a disaster area by helping them get mortgages or be re-established as homeowners. Some of the benefits for the borrower are no down-payment and eligibility for 100 percent financing. Yet, this mortgage insurance does require an up-front insurance premium and the borrower is responsible for such expenses as closing costs.
 

Room to Improve Federal Relief Responses

While the above relief measures do help a range of people, critics have pointed out that FEMA can mismanage situations. Hurricane Katrina from 2005 illustrated this shortcoming, including not providing enough food and water. Likewise, the degree of direct aid is limited to basic provisions and unemployment, which usually does not compensate for the degree of lost income.

With climate change provoking a range of wildfires and floods, FEMA has faced increased criticism. In particular, recent academic studies and a New York Times report have focused on the disparity of aid to homeowners based on race. These findings reveal that more aid goes to wealthier neighborhoods that are predominantly white.

This type of criticism point to ways that the federal to state relief benefits could be improved.
 

Learn more about Disaster Relief Benefits

The federal government will continue to help with disaster relief benefits. To learn more about what benefits are available, you can visit the following website: Benefits Depot. You can also find out more about ways that disaster relief can continue to be enhanced.