Last-minute changes to the federal relief plan passed late Monday aren’t as rosy as some on unemployment had hoped when the proposal made its way through Congress last week. But the new plan, which picks up where the CARES Act ends on Dec. 26, extends jobless benefits for 11 weeks, instead of 16, and has some notable contributions from Colorado.
An extended benefits program that ended abruptly and kicked thousands of Coloradans off unemployment in late November can be reinstated. Another measure allows state agencies to waive unemployment overpayments if the recipient was without fault.
Sen. Michael Bennet pursued both changes and proposed the waiver for the State Extended Benefits program. He credited state legislators and unemployed workers for bringing it to his attention.
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“I’m grateful that the final package included a fix that will enable about 20,000 Coloradans and their families to continue to receive unemployment benefits,” Bennet said in an email. “These workers and their families should never have had a lapse in these benefits in the first place. I thank the state legislature and Gov. (Jared) Polis for acting quickly to extend the benefits. I’m glad we were able to do our part in Congress, too.”
The number of unemployed people in Colorado has ballooned in the past month as new restrictions were enacted to limit the spread of the coronavirus. Restaurants have seen widespread layoffs after in-person dining was banned in several counties and that caused first-time unemployment claims to spike for the past several weeks. But it was the end of all pandemic unemployment benefits on Dec. 26 that had many worried.
Last week, the proposed relief bill planned to extend several unemployment programs 16 more weeks, plus reinstate the Pandemic Unemployment Compensation program to pay an extra $300 a week, or half the amount from earlier this year.
But that program, plus the Pandemic Unemployment Assistance (PUA) and Pandemic Emergency Unemployment Compensation (PEUC) programs now are capped at 11 weeks and will end March 14. The change came as part of a compromise to reduce extended unemployment by five weeks in exchange for $600 stimulus checks sent to most Americans. Some policy analysts would have preferred the money go to those in dire need.
“It’s really unfortunate,” said Michele Evermore, a policy analyst who tracks extended benefits at the National Employment Law Project. “The substitution for the extra unemployment weeks was the $600 for everyone. And while I don’t have a problem with everybody getting a $600 check, I’d really rather that not come from unemployed people who need it more.”
Coloradans on pandemic unemployment will see a pause in payments when the CARES Act programs end on Dec. 26. The state has estimated that 288,000 on unemployment are affected (another 97,108 on regular unemployment as of Dec. 5 should continue receiving benefits).
The pandemic not only wreaked havoc on workers’ lives, but also created chaos within the state labor department. Like others nationwide, Colorado’s labor department rushed to process tens of thousands of new claims each week, compared to just a couple thousand before the pandemic. One week in mid-April saw more than 100,000 new claims.
Because of the confusion in the spring surge, thousands of PUA folks were approved for more money than they should have been, causing the state to later send out demands for repayment. It caused Meggan Hurley to start a petition to bring attention to the overpayment issue. She’s glad the changes were made, but says people deserve better.
“I’m hoping that it brings it to the forefront of decision making,” said Hurley, a self-employed business owner in Woodland Park who got a message in September that she owed $13,969 in overpaid benefits. “But to get even less (in pandemic benefits) now when people are more strapped because they’ve exhausted their savings, it’s heartbreaking.”
Part of the new relief package allows state agencies to waive inadvertent overpayments, as long as it “was without fault on the part of any such individual (or) such repayment would be contrary to equity and good conscience,” according to the bill.
Coloradans socked with overpayment bills had incorrectly filled out PUA applications. PUA workers, typically contractors and the self-employed, were supposed to write in their net income, after expenses. But many wrote in their gross income. The state later forgave $1.4 million in overpayments.
“Colorado was one of the first states to really start issuing overpayment notices for PUA and it was really scaring a lot of people,” Evermore, the policy analyst, said. “Colorado tried to write off their PUA overpayments, but this gives the state the ability to just wave it once and for all and not worry about it. That’s a big deal.”
Reinstating State Extended Benefits
Then in November, at least 16,000 people were kicked off the State Extended Benefits system because a calculation of the state’s unemployment rate fell below 5%. The state would have to wait 13 weeks to return to the program, even if its unemployment rate rose. SEB was the last hope for many people who had exhausted all of their benefits.
Bennet’s team credited state Rep. Cathy Kipp, a Democrat from Fort Collins, for leading the charge to reverse the mandatory 13-week waiting period after reading coverage in The Colorado Sun of the sudden lapse in benefits.
“Everybody really pulled together and did everything they could to make it so that Coloradans would get that extra unemployment insurance, which we think they should be entitled to,” Kipp said. “When I talked to (Colorado Department of Labor), they told me there were six other states in the same position as Colorado. I really think this legislation is going to help people outside of Colorado as well.”
SEB, which provided an additional 13 weeks of regular unemployment benefits, ended Nov. 7 when the state’s unemployment rate fell below 5%. But Kipp discovered a different calculation that would have kept Colorado on the program and paying claims till the end of the year. An amendment was proposed and during the special session this month, the state legislature adopted the new calculation.
However, it appeared to be too late because allowing a state to return to the extended benefits program after it had left had never been done. So Bennet made the proposal, which landed in the first half of the 5,593-page bill in Section 266: Waiver to Preserve Access to Extended Benefits in High Unemployment States. The change means Colorado doesn’t have to wait 13 weeks to rejoin SEB.
“During the period (starting) on Nov. 1, 2020 and ending Dec. 31, 2021, that’s very specific,” said Evermore, with the National Employment Law Project, as she read through the text of the bill on the SEB waiver. “Yeah, it really does look like the Colorado fix to me.”
Few, if any other states, were disqualified from the program and then adopted the new measure in that specific period, she explained.
The process to bring back SEB, however, isn’t automatic. The U.S. Secretary of Labor must offer guidance to the states first.
And officials from the Colorado Department of Labor and Employment confirmed as much, saying “since this is unprecedented we will also need to await (U.S. Department of Labor) guidance.”
The new plan also helps “mixed earners,” or those who earn money from gig work and jobs where taxes are withheld, or a W-2 job. Folks who primarily made a living off gig work were required to file for regula unemployment, even if the potential benefit was much lower. The new relief plan allows states to opt in and provide mixed earners with at least $5,000 in self-employment income to be eligible for an additional $100 per week.
And should the state return to SEB because its unemployment rate is back up, the federal plan will provide full funding to keep this additional benefit to provide 13 additional weeks of pay for those who’ve exhausted every other option. Having full federal funding was a requirement by Colorado’s amendment to the SEB program — otherwise the state is responsible for 50% of the benefit.
Department officials expect to reprogram their computer systems as soon as they receive federal labor department guidance. The agency also plans to send a message to everyone on unemployment later this week, after the bill is signed into law. The bill now awaits President Donald Trump’s signature.
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