Written by T. Logan Dayne
California’s Employment Development Department wrote a letter to Congress this week asking for the feds to make it easier to forgive overpayments for claimants. As the pandemic unemployment benefits start to fizzle out, millions of Californians are going to see their supplemental benefits go too. With the closing of these benefits, the California EDD is facing a new challenge, getting the money back.
The EDD froze roughly 345,000 insurance claims but suspects that 98% of those are fraudulent with only 485 having been verified. The amount of fraudulent claims in the system has forced the EDD to go and have recipients retroactively prove their status. A move that seems to offer its own challenge considering this will entail about 1.4 million individuals that benefited from the federal pandemic unemployment benefits. The executive director of the Center of Workers’ Rights, Daniela Urban, stated that “it’s clear EDD does not have a standardized process of reviewing these documents.” Of these 1.4 million, only 21% have been verified. This is largely because the verification process has given little ease for freelance workers or other poorer Californians already disproportionately hurt by the pandemic. Several of those on unemployment report losing papers needed for the EDD in accidents such as fire. Others, such as those who do freelance work, get paid only in cash making the process particularly difficult.
The California EDD, which has had 3 directors in only 2 years, has been warned that this Clawback program is an effort to get back the money that has already been spent by many could be particularly hurtful and that ending some of the unemployment benefits will not push people back into the job market. California prosecutor, McGregor Scott, hired to lead investigations for large-scale unemployment fraud expressed skepticism in the states ability to recoup the money, an estimated loss of $20 billion due to fraudulent claims. If an individual is caught, they are required to pay back the sum received in addition to a hefty fine. For those in extraordinary circumstances unable to pay back what was given, a special waiver can be obtained but local news sources were unable to contact anyone who was aware of how to apply for the waiver.
Photo Cred: KTVU FOX 2
