Wednesday - Nov 25, 2020

Coronavirus stimulus: New unemployment requirements make it tougher for workers to qualify

by Denitsa Tsekova

Shared from Yahoo Finance


The extra $300 in weekly unemployment benefits provided under the president’s memorandum comes with new requirements, making it harder for jobless Americans to qualify.

One in 5 jobless Texans — or around 350,000 people who currently receive benefits in the state — are ineligible for the $300 available under the Lost Wages Assistance (LWA) program because of these changes, according to Cisco Gamez, a spokesman for the Texas Workforce CoMany of them don’t qualify because they said they didn’t lose their job due to COVID-19 related reasons the first time they filed their claim, which wasn’t a requirement to receive the extra $600 under the CARES Act. Jobless Texans will have to respond to the question again in subsequent weeks and may become eligible for the $300.

“In order to be eligible for the Lost Wages Assistance program, their unemployment right now has to be due to COVID-19,” Gamez said. “If it was due to something other than COVID-19… then they would not be eligible for the extra benefits.”

This question was previously asked only once when people initially applied for the benefit, but now they are going to be asked every one or two weeks, according to guidance issued by the Employment and Training Administration. This could add even more confusion to the already difficult application process, according to Michele Evermore, a senior policy analyst at the National Employment Law Project.

“Whenever the unemployment insurance agency asks additional questions, it knocks people off,” she said.

‘It’s a confusing question for people’

Texas is the second state to start paying out the extra benefit. Other states may have similar problems due to the changing eligibility requirements. If people don’t indicate weekly or biweekly — depending on the state — that they’ve lost work due to the coronavirus pandemic, they’ll become ineligible.

“It’s a confusing question for people,” Evermore said. “People are getting it wrong and they’re losing their benefits because they’re getting asked this weird question now.”

In most states, you only had to certify that your unemployment was COVID-19 related the first time you applied for benefits — not on a weekly basis. One exception is Arizona, the first state that started paying the extra $300. Jobless workers there were asked that question weekly before the memorandum was signed.

“It’s exceedingly rare for a state to be asking about any COVID-related thing for regular unemployment insurance,” Evermore said.

‘It makes sense to waive the requirements’

There are other new requirements, too, that didn’t exist under the CARES Act. To qualify for the LWA, jobless Americans will have to make at least $100 a week of unemployment benefits leaving many low-income earners out. People making under $100 per week account for 6% of unemployment insurance (UI) recipients and 4% of jobless Texans currently getting benefits.

“It leaves out the poorest recipients,” said Gbenga Ajilore, a senior economist at the Center for American Progress, a nonprofit for public policy research and advocacy, told Yahoo Money earlier this month. “This is needlessly cruel because they are already struggling and it increases the difficulty for states to implement the program.”

There is another new question jobless Americans will have to answer as well when applying for benefits. More states are reimposing a job search requirement as part of the unemployment insurance application, which was waived at the beginning of the pandemic.

To meet the work search criteria, unemployed Americans have to apply for one to five jobs a week depending on their state. The requirement exists in all states but was waived due to the pandemic in exchange for emergency federal funding. The work search requirement is being reinstated on a state-by-state basis.

“It’s unfair for them not to be able to receive benefits if there’s nobody hiring,” Ajilore said. “It makes sense to waive the requirements because people need to get unemployment insurance and no one’s hiring.”

‘Hope they’re doing it carefully enough’

The new questions come as states set up parallel systems to administer and pay the benefits under LWA because they can’t use their regular system to pay them out.

Arizona, Lousiana, and Texas are the only three states — out of 34 approved for funding — that have started distributing the extra unemployment benefits. While Maryland forecast “late September” and Colorado said “mid-to-late September” before paying out benefits, many states can’t give a timeframe.

Arizona and Texas have been quicker than other states at implementing the benefit, but if any mistakes were made in the process, states or recipients will have to pay some of the benefits back.

“What concerns me is the speed at which some states are actually getting this up,” Evermore said. “It’s good for claimants now. I hope they’re doing it carefully enough, not in a way that disqualifies recipients later or that state has to pay back the money later.”

Denitsa is a writer for Yahoo Finance and Cashay, a new personal finance website. Follow her on Twitter @denitsa_tsekova.