Unemployed Coloradans may have to wait 2-4 weeks before getting more federal aid

It will take two to four weeks for the state to begin distributing new federal unemployment benefits, though it “may be a little sooner” because the state is upgrading its outdated computer system this week, Joe Barela, executive director of Colorado’s Department of Labor and employment, said in a surprise visit during a call with reporters on Tuesday.

The programs will roll out in phases, Barela said. “Most likely, the Federal Pandemic Unemployment Compensation, which is the additional $300 a week, will be the first program we roll out once we have that programmed and ready to go.”

That’s a relief to a half-million Coloradans who are in the state’s unemployment system. Many saw their benefits end on the day after Christmas, when the CARES Act expired and stopped paying federal benefits to self-employed and gig workers and to tens of thousands of Coloradans who had used up their regular state unemployment benefits. 

The new federal COVID relief plan, passed Dec. 27, provides up to 11 more weeks for everyone on unemployment, plus an extra $300 a week during those 11 weeks. Once the state’s computer system is upgraded, it still must be programmed to add the federal benefits, which means a chunk of the population won’t be able to get paid until after the update is completed. But those who are eligible will be able to backdate claims to Dec. 27.

The upgrade begins Tuesday evening, which means anyone on unemployment will not be able to log into their accounts. The work was supposed to take place last spring but was delayed because of the pandemic. As a stopgap, the state kept people on regular unemployment on the old system and put those receiving only federal benefits on the new system. By Sunday, everyone is expected to be on the new computer system and the state will move forward to program it for the extended federal benefits. 

Cher Haavind, deputy director of the Department of Labor, said there is no timeline for when extended benefits begin. But the new computer technology will cut reprogramming time in half. 

“Had we stayed with the combination of old and new technology, some of these programs in old technology would not even be possible to program,” she said.

To prevent people on regular unemployment from missing a payment during the computer upgrade, the agency messaged a half million people last week to tell them to go ahead and request their next payment early. But the agency forgot to remove a warning that if one claimed their benefit too early, their claim would close, which alarmed many recipients. That has now been resolved and people on regular unemployment who would normally request their next payment on Jan. 10 can do so today, before the old system shuts down for the upgrade.

People who were on federal benefits, including Pandemic Unemployment Assistance (PUA) or Pandemic Emergency Unemployment Compensation (PEUC), do not qualify for benefits after Dec. 26 under the CARES Act. But both groups will be eligible for more aid when the federal benefits restart this month or early February.

Those on regular unemployment can start using the new system Sunday and get access to payments weekly instead of every other week. The new system is supposed to be more transparent and help people resolve more of their issues online without needing to call a customer service agent or chat with a virtual agent.

But if it’s not ready Sunday, there are contingency plans, including rolling back to the old method, Haavind said. She advised users to read all emails from the department of labor and check the state’s unemployment site for updates at coloradoui.gov.

PUA and extended benefits

As for the new federal relief benefits, those eligible for additional weeks of PUA or PEUC will be notified when the system is ready.

“We believe there will be an additional step required by those claimants but we don’t have guidance on that now and we’ll be communicating to those folks accordingly,” Haavind said. 

She said the hope is for both programs to start at the same time as the weekly bonus of $300, called the Federal Pandemic Unemployment Compensation. The belief is that FPUC will be easier to restart because all it does is pay people who are on unemployment an extra $300 a week.

But without further guidance, the start dates for PUA and PEUC cannot be solidified right now.

“(The $300 weekly payments) would be the quickest to roll out but yes there is a chance we would only be paying regular state claimants until such time as PEUC and PUA are programmed,” she said, “but again we really do not have firm estimates from (vendor) Deloitte on this.”

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In other unemployment updates, Colorado has again fallen off the State Extended Benefits program, which provided an extra 13 weeks of benefits to those who had exhausted all other regular unemployment. While there were attempts to reverse Colorado’s falling off SEB the first time, the state’s unemployment rate was at 6.4% in November and needed to be higher in order for those federally-funded benefits to continue. 

Colorado remains ineligible for SEB. But Phil Spesshardt, the Department of Labor’s benefits services manager, said “at some time here in the near future, I would anticipate we are going to trigger back on.”

The state is also waiting on additional guidance to determine whether those who were on SEB when it ended and moved to PUA for the rest of in 2020 will see a reduction in the 11 weeks of new federal benefits, said officials.

Fraud continues

Colorado’s unemployment system was attacked for most of last year by scammers using stolen identities to make PUA claims. But after the PUA program ended on Dec. 26, fraudulent claims on the regular unemployment system have been on the rise. 

The agency said it’s getting more reports from employers of current employees who filed a claim for unemployment. Victims are reporting that they are receiving U.S. Bank ReliaCards in the mail, which is how the state pays unemployment benefits. 

Spesshardt said the labor department has discovered fraudsters are using rental and for-sale home listings to get addresses and may be stopping by to steal unopened mail. 

“The hope there is that nobody is present and they’ll actually find those ReliaCards,” Spesshardt said. “If you have people out there with the house for sale and they’re not occupying it or they have a rental property and they’re not occupying it, they may want to be checking that mail on a regular basis to see if there are ReliaCards in there so that they can inform us so we can get those claims shut down.”

If you’re a victim, the state has a fraud report form to fill out to notify the agency. It also recommends filling out the U.S. Bank form and contacting the bank at 1-855-279-1678 to report the fraudulent card and ask them to deactivate it. And all users should check their credit report with the three credit bureaus. More details are at cdle.colorado.gov/fraud-prevention.

This story was updated at 2:45 p.m. with more details for those on pandemic unemployment benefits.