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SACRAMENTO, Calif. (AP) – The administration of California Gov. Gavin Newsom on Thursday announced a major change in the way the state pays unemployment benefits, potentially unlocking payments for up to 100,000 people who have spent weeks or months without assistance.
Obtaining unemployment benefits is a two-step process. First, state officials have to decide whether people are eligible. If they are, the state begins to pay them. But these people must contact the state every two weeks to confirm that they are still eligible to continue to be paid.
Sometimes state officials need to investigate residents’ eligibility after they have been paid. When this happens, the state stops paying them until the investigation is complete. Before the pandemic, these investigations generally did not take too long. But during the pandemic, the state was overwhelmed with millions of claims that resulted in long delays.
The Employment Development Ministry announced Thursday that it will continue to pay unemployment benefits to people even while they investigate their eligibility. The change is part of a legal settlement between the state and the Center for Workers’ Rights, an advocacy group.
The change only applies to people who have certified benefits and who have already received at least one week of payment in the past. Daniela Urban, executive director of the group, said it could affect up to 100,000 people.
“This is a monumental change on EDD’s part that will allow more claimants to be paid on time,” she said.
Unemployment claims have skyrocketed across the country during the pandemic, causing arrears in many states. Claims have slowed since then, but California still has over 3 million people receiving some form of unemployment benefit. The state has had a persistent backlog throughout the pandemic.
The change is not without risk for Newsom, which faces a recall election in September. The governor has come under heavy criticism for failing to prevent billions of dollars in fraudulent benefit payments to inmates and others who were not eligible to receive them. But he has also faced complaints for a growing backlog of people with legitimate claims who could not be paid due to complex bureaucracy overwhelmed by the pandemic.
“There is a permanent trade-off between prompt payment of unemployment insurance claims and anti-fraud protocols,” said Michael Bernick, former director of the employment development department and now a lawyer at the Duane law firm. Morris. “This action today of paying ongoing claims that have been the subject of previous audits appears to have low risk of fraud, while reducing arrears.”
It is possible that this action will cause the state to pay people who are not eligible. In a press release, the Employment Development Department said people who receive benefits when they are not eligible may have to repay them at some point. But it is possible to forgo reimbursement if people claim to be in financial difficulty and the overpayment is not the result of fraud.
State Assembly Member Jim Patterson, a Republican from Fresno, said state action is a “staggering admission that they cannot do their basic job” of paying claims legitimate while eliminating fraud.
“Now, to clear their giant backlog, they’re also going to take the dangerous risk of paying the fraudsters,” Patterson said.
As of March 2020, more than 23 million people have filed for unemployment in California, and the state has paid out $ 160 billion in benefits. Meanwhile, more than 226,000 people are still waiting for the state to resolve their claims and pay them.
Among them is Abdulkarim Adam, 57, who lost his job as a bus driver for a private company during the pandemic. The state stopped paying him unemployment benefits in March and never told him why, he said.
Adam had to borrow money from friends and move in with his sons while he waited. He said he called the state every day but couldn’t come by. He was surprised to later receive a text from the agency, asking for feedback on its customer service.
Adam said he responded with a flattering message, hoping it would prompt the agency to pay him faster. When that didn’t work, he then sent an angry message comparing the agency to the authoritarian dictatorship in North Korea.
He was relieved on Thursday to finally hear the state policy change and hoped it would allow him to get his money back faster.
“It will ease a lot of financial hardship and improve our lives,” he said.
The Department of Employment Development received more than 5.8 million calls from 421,005 unique callers in the last two weeks of June, according to a report on the department’s website. The ministry said it responded to 478,749 calls during this period.
Urban said many of those calls came from people like Adam wondering why their performances had been cut off. She said fewer of those people are likely to call now that they know their benefits will not be interrupted.
“I think this will allow claimants to be more confident in relying on the support of these unemployment benefits, while they still have them, as they seek post-pandemic work,” he said. she declared.
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