Even though the federal government extended the benefits on Dec. 27, just one day after they expired, the state Employment Development Department said Friday that a programming issue prevented it from reinstating them immediately for people whose benefits had run out before Dec. 26. It will send emails, texts and mail this week to notify affected people that they need to certify for benefits starting March 7.
“I’m just appalled,” said state Sen. Josh Becker, D-Menlo Park. “A lot of people will just get a letter out of the blue saying, ‘We can’t process you until March 7.’ Californians rely on benefits for food and shelter, and now this group will have to wait (at least) two and a half months.”
The revelation is the latest in a string of missteps at EDD, which has struggled to pay claims to an unprecedented surge of people made jobless during the pandemic, while losing at least $11 billion and possibly up to $30 billion to fraudsters. On Thursday state lawmakers proposed a raft of bills to reform the troubled agency.
December was also when EDD froze 1.4 million accounts to guard against fraud, an action that swept up many legitimate claimants. It has been notifying those with frozen accounts in batches over time that they need to go online to verify their identities. Many people whose benefits stopped in December may have thought they were part of the fraud-related freeze, instead of the newly revealed issue with lapsed federal money.
“The roadblock to getting money to massive amounts of people who need it desperately is the same old problem — dinosaur technology,” said Assembly Member Jim Patterson, R-Fresno.
People affected by the latest revelations were getting unemployment under two programs created under the federal CARES Act. Many were receiving a benefit created under the act called Pandemic Unemployment Assistance, which covered self-employed people normally ineligible for unemployment insurance. Others were receiving Pandemic Emergency Unemployment Compensation, which provides up to 13 weeks of additional federal benefits to laid-off employees who have used up their regular state jobless benefits. State unemployment benefits end after 36 weeks in California.
EDD detailed the issues in a Friday call with lawmakers, as well as in an email to lawmakers reviewed by The Chronicle. It sent out a news release late Friday discussing the December extension of benefits that did not acknowledge the lengthy delay.
“We’re all so exhausted by the deluge of bad news from EDD, and this Friday night news adds insult to injury,” said Assembly Member David Chiu, D-San Francisco. “I’m not sure how EDD can imagine that people can just go without income for months at a time.”
Those who will experience the gap are people who ran out of either PUA or PEUC before Dec. 26, EDD said in the email.
“EDD has been working on the programming needed to essentially establish new claims incorporating the up to 11 additional weeks of benefits payable for weeks beginning December 27,” the letter said.
It’s not clear how many Californians are affected. Between 750,000 and 1.6 million state residents were receiving PUA and PEUC in December, according to two outside analyses. The California Policy Lab put the number at 750,000, while the Century Foundation estimated it at 1.6 million. However, not all of those people will have to wait until March — only those whose benefits had lapsed before Dec. 26.
EDD’s Friday email to lawmakers said it had completed “phase one” of adding new benefits for those who still had time left on their claims on Dec. 26. This implied that those people may have been without benefits from Dec. 26 until very recently.
Becker said his office is working with a separate group of people who had funds in their account on Dec. 26, but had their accounts closed because the original CARES Act had sunsetted. These people should have had their accounts reopened automatically and extended, but many had not.
“We have been helping them reopen their claims and get their benefits paid out,” he said.
On Dec. 24, EDD put out a news release saying it was preparing for the extension of the two CARES Act unemployment programs. The agency “cannot implement the new programs until it receives guidelines from the U.S. Department of Labor ... describing how the states will be required to follow the law,” it wrote. “However, EDD is making program adjustments with what information is available so when federal guidelines and details become available, EDD can complete the necessary programming to make these new benefits available as soon as possible.”
Congress extended the benefits by adding 11 weeks to PUA, allowing people to receive it for up to 57 weeks. It also extended PEUC by 11 weeks, giving it up to 24 weeks in total.
The agency gave an update on the 1.4 million claims it suspended in December due to fraud concerns. It said 367,749 claimants have successfully verified their identities and almost all of them had payments processed, after the agency took another seven to 10 days to check on other eligibility requirements. About 200,000 were told they had been disqualified and were directed to appeal or complete a new questionnaire, while 100,000 others were mailed paper requests for identity verification because they didn’t have online accounts.
The agency will email and text those affected again to tell them they need to verify identities. Those who do not respond will be disqualified and notified of appeal rights, it said.
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