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Friday, March 31, 2023

Researchers fear that low-income Californians may have trouble paying unemployment benefits.

Researchers Fear That Low-Income Californians May Have Trouble Paying Unemployment Benefits.

New government policy could require nearly 900,000 Californians to get their unemployment benefits back because they weren’t working or looking for work, but some researchers fear that a money-back campaign could force low-income people to pay back thousands of dollars they no longer have. …

Last month, the State Department of Economic Development began sending out work confirmation notices to one-third of California’s 2.9 million unemployment benefit recipients. The federal program, which ran from March 2020 and ended in September, was aimed at helping people who are usually not eligible for unemployment benefits because they are freelancers or small business owners.

The government asks them to retroactively prove that they worked or planned to work before applying for unemployment – a standard requirement for receiving benefits. If they are unable to provide this documentation, they will be classified as ineligible and asked to return the benefits.

Full repayment can be more than $ 32,000 if the recipient received all benefits throughout the program. In addition, if the plaintiff provides false information, the state can impose a fine of 30%. Some experts are now suggesting that recipients be allowed through, even if they cannot prove they are eligible for assistance.

“We have to say, ‘Look, if you got unemployment benefits during this time, it’s okay,” said Chris Hoen, executive director of the left-wing California Center for Budget and Policy in Sacramento.

“When it comes to fraudulent claims,” he added, “then try to fix the administration of the system” instead of requiring recipients to prove they are eligible.

It is unclear where the legislators are. Anaheim Democratic Assembly member Tom Daley, chairman of the Assembly’s Insurance Committee that oversees EDD, did not respond to a request for comment. Assemblyman Chad Myers of Jucca Valley, the independent representative and acting vice chair of the committee, also did not respond.

The Senate Labor, Public Sector Employment and Pensions Committee chairman and vice chairman – Democrat Dave Cortese of San Jose and Republican Rosilisi Ochoa Bog of Yukaypa – did not respond to requests for comment.

The EDD noted that the repayment policy is a federal requirement passed by Congress in the Continuous Unemployed Assistance Act 2020. EDD recognizes that it may refuse repayment if the overpayment was not the fault of the recipient, was not fraudulent, and if the repayment could cause extreme difficulties. …

The new policy is an attempt to recoup the roughly $ 20 billion lost to California fraud. But McGregor Scott, the former US attorney who led the state’s unemployment fraud investigation, doesn’t believe EDD’s payout policy will improve significantly.

Huge losses to the state came after EDD, inundated with jobless claims at the start of the pandemic, began speeding up the process by dropping proof of work requirements. Investigators said the rollback allowed organized crime and inmates to siphon money out of the state through fraudulent claims.

Recipients who receive EDD notices must use pay stubs, tax returns, business licenses, or job offer letters to prove they were employed or planned to work prior to applying.

Those who applied on or after January 31st have only 21 days to submit their documents. Those who applied before this date and received payment after December 27, 2020 have 90 days to complete.

“We probably need to do this with compassion,” said Jesse Rothstein, professor of public policy and economics at the University of California, Berkeley. “We won’t be able to collect in every case.”

According to the United Ways of California, even before the pandemic, almost one in three families in California tried to pay for basic necessities. During the pandemic, a report from the Ludwig Institute for General Economic Prosperity found that 4.8 million Californians were looking for but unable to find full-time jobs that paid the living wage.

World Nation News Desk
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