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COVID & Unemployment

Most states have been underpaying Pandemic Unemployment Assistance benefits

Samantha Fields Dec 1, 2020
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Olivier Douliery/AFP via Getty Images
COVID & Unemployment

Most states have been underpaying Pandemic Unemployment Assistance benefits

Samantha Fields Dec 1, 2020
Heard on:
Olivier Douliery/AFP via Getty Images
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COPY

Most states have been underpaying people who are on Pandemic Unemployment Assistance for months, according to a report out this week from the Government Accountability Office. Instead of calculating PUA benefits based on people’s income, many states have just been paying the minimum benefit.

“In the beginning, everyone was getting the minimum benefit because states were moving this out very quickly, and they wanted to get the benefit in people’s hands,” said Andrew Stettner at the Century Foundation. 

Pandemic Unemployment Assistance was a new program, created as part of the CARES Act to temporarily allow people who are not eligible for traditional unemployment insurance — freelancers, gig workers and others who are self-employed — to get benefits during the pandemic, and states had to scramble to get it up and running.

Eventually, though, they were supposed to go back, look at claimants’ tax returns or other proof of income, calculate how much they should be getting based on their income, and adjust their benefits accordingly.

“But because this is not a seamless process, many workers have not gotten their benefits readjusted, even if they have successfully sent in their tax return,” Stettner said. 

In 27 of the 41 states that reported PUA data in September, the average weekly benefit was not much higher than the minimum weekly benefit, which “suggests that many individuals in these states are receiving the minimum benefit,” according to the GAO report. In 29 of those states, the minimum PUA benefit is below the poverty level. 

Millions of people who are self-employed, freelancers or gig workers have received PUA benefits at some point during the pandemic. Many are likely eligible for thousands of dollars in back pay. 

How much people are being underpaid varies by state, but “in many states with decent benefit amounts, people are being underpaid by hundreds of dollars [a month],” said Anne Paxton, an attorney and policy director at the Unemployment Law Project in Washington state.

Some states are starting to go back and recalculate benefits, though it’s unclear how many. 

“Hopefully, what that means is that this month, as benefits may be winding down, at least some people will get some notification that they get a lot of back pay,” said Michele Evermore, senior researcher and policy analyst at the National Employment Law Project.

But people should be proactive and ask their state unemployment office to recalculate their benefit, rather than wait and see if the state will do it automatically, according to Evermore, Stettner and Paxton — and they should do it before Dec. 26, when the Pandemic Unemployment Assistance program is currently set to end. 

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