About 1 million Californians could have to repay pandemic unemployment money to EDD
About 1 million Californians who got unemployment payments from the pandemic-related federal benefit program now have to prove to the state they had a prior work history – or face paying back benefits.
“A potential overpayment could be all benefits you received,” warns the state’s Employment Development Department, which manages California’s unemployment program.
And, EDD says, “we will add a 30% penalty if we determine that you intentionally gave false information or withheld information to receive benefits.”
According to the federal rules, the new documentation requirement could also apply to those who filed a claim and never even received a payment.
Those affected got payments from the federally funded Pandemic Unemployment Assistance program.
PUA was created in March 2020 to ease the impact of the sudden, deep pandemic-triggered recession. PUA ended in early September.
An estimated 2.9 million Californians got benefits from the program, which provided help for people who traditionally would not qualify for regular state-provided unemployment insurance, such as independent contractors and small business owners.
Initially, federal law only required EDD to get income substantiation from PUA recipients when they wished to collect more in weekly benefits than the minimum of $167.
But those who did not request such an increase were not required to provide any documentation verifying their income or any other proof of work.
About 30% of those who got PUA have to provide the new employment data. The rest either already provided that proof or are not subject to the federal requirement.
Unemployment fraud
The easy access to benefits, in California and elsewhere, triggered massive fraud. California officials estimated last month the state has paid out about $20 billion in improper claims, or about 11% of what was paid since the Covid pandemic began in March 2020.
The federal government has tried to combat the problem by requiring a higher level of proof from claimants showing that they had worked prior to collecting benefits.
The requirement means people who got PUA payments on a 2020 claim after December 27, 2020 or filed a new claim after that date have to provide EDD with documentation showing they had worked, were self-employed, or had planned to work or be self-employed before the start of their claim.
In August, EDD started alerting claimants that this new documentation requirement of employment status would be coming soon, a warning that aimed at giving people time to prepare accordingly.
Keeping your benefits
Different types of documentation can be provided. Among them could be a tax return, business license, business receipt or invoice, W-2 form or pay stub.
Also accepted are documents that could be used to prove plans for employment or self-employment.
Proof of employment could include a letter from a prospective employer showing the date the work was to begin.
To prove self-employment, someone could include business licenses, state or federal employer identification numbers, written business plans or lease agreements.
If someone was receiving PUA benefits last year, they need to submit forms showing work from 2019. If they began getting PUA payments in 2021, they must send documents from 2020. Additional information is available on EDD’s Pandemic Unemployment Assistance webpage.
EDD has begun notifying those who have to submit this information via text, email and on the UI Online homepage for claimants.
If someone doesn’t respond by a due date, they’ll get a follow-up notice in the mail.
If they don’t respond to that notice, they could be deemed ineligible for PUA benefits paid this year, and could have to pay back what they’ve received.
This story was originally published November 23, 2021 at 1:09 PM.
.jpg)