Delays for unemployment benefits persist, over a year into pandemic

A career fair in Louisville, Kentucky on June 23, 2021.

Luke Sharrett / Bloomberg via Getty Images

Unemployment benefits are still not reaching people as quickly after more than a year after the Covid pandemic.

According to the Department of Labor, which reflects the US state averages, about 38% of workers who received their first benefit payment in June had waited more than 21 days for the funds to arrive.

Three weeks is the official barometer for a “timely” payment of benefits.

By comparison, in January 2020, before the virus led to mass layoffs, about 7% of recipients waited more than three weeks for their first payment.

“Unfortunately, delays are far too common,” said Andrew Stettner, unemployment benefits expert and senior fellow at The Century Foundation, a progressive think tank. “Twenty-one days is a high standard.

“But that’s on purpose,” he added. “The idea of ​​this program is to provide people with timely advantages.”

Some people wait months. More than 14% of applicants waited at least 70 days for their first payment in June. Less than 1% did so before the pandemic.

“A lot of people live from paycheck to paycheck, and this is supposed to be compensation to keep their bank accounts solid and pay the monthly bills,” added Stettner. “You don’t just want good numbers in good times.”

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Of course, the course of delays at the national level has improved from pandemic lows. At the low point in June 2020, according to the Ministry of Labor, around half of applicants did not receive payment on time.

Persistent delays are likely the result of many factors.

State systems had collapsed last year amid a flood of applications as millions of workers lost their jobs and sought income support. The number of claims fell dramatically to around 444,000 in the past week, but is still double the pre-pandemic level.

States also had to implement new rules in multiple rounds of pandemic relief laws while they continued to process and pay out funds – a task made difficult by outdated administrative systems in many states.

Criminal attempts to steal benefits have also led states to crack down on anti-fraud measures. These steps have helped prevent theft, but have also slowed the receipt of benefits for some workers whose claims, while legitimate, are flagged for fraud.

Companies may also have an incentive to appeal a worker’s claim. Your tax rate generally increases as laid-off workers receive benefits. (However, this policy can also act as a deterrent against layoffs.)

“There are some structural problems,” said Stettner of the US unemployment system.

Some states fared worse than others.

California, Kentucky, Ohio, South Carolina, and Virginia made on-time payments to the lowest proportion of applicants – in these states, more than 60% waited at least three weeks for their first round of aid, according to the Department of Labor.

In comparison, in North Dakota and Rhode Island, less than 10% waited that long.

In some areas, even those who started receiving benefits experienced delays in subsequent payments.

In California, for example, this can happen if an employee mistakenly answers a bi-weekly certification question incorrectly, according to Rita Saenz, director of the California Department of Employment Development. This requires an authorization check, a process that is several weeks behind schedule

On July 23, the state began making contingent payments to such individuals – essentially with the money before the interview was conducted. (They’d have to pay the money back if they ultimately weren’t eligible.)

“We know that many claimants who cleared fraud filters and verified their identities have waited too long to be paid,” Saenz said. “In response, we’re starting a new program that will help many Californians get benefits faster.”

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