Ten months after the start of a COVID-19 pandemic, which left many unemployed, the state unemployment agency suspended payments to 1.4 million benefit claims, irritating unemployed Californians while trying to contain rampant fraud.
The mass suspension is the latest controversy for an agency that has been criticized for congested phone lines, computer failures and operational problems that have left hundreds of thousands of Californians frustrated without financial aid, many for months.
State lawmakers say their offices have been inundated with desperate calls from constituents who don’t understand why their unemployment benefits have been cut by the state’s Department of Employment Development.
“I am angry and disbelieving that EDD continues to fail in its only job – sending benefits to those in need,” said Representative Miguel Santiago (D-Los Angeles). “Suspending benefits during one of the highest unemployment rates and just before the bills are due is cruel, especially during a pandemic.”
The state agency has processed an unprecedented 18.5 million claims and has paid more than $ 110 billion in benefits since the pandemic began in March, closing many deals and leaving people without work.
At the same time, authorities are investigating the possibility that more than $ 4 billion has been paid by the state agency in fraudulent claims, usually made by criminals who use stolen identities.
“As we approach the end of the year and the start of the recently extended federal unemployment benefits, EDD has applied additional fraud detection screening to existing claims established during the pandemic,” said Loree Levy, an agency spokesman. “About 3.5 million of them were found to be potentially fraudulent.”
As a result, EDD employees have suspended 1.4 million claims in the past few days until beneficiaries can verify their identity and eligibility for benefits, said Levy. An additional 1.9 million complaints were disqualified after EDD determined they were not eligible.
Suspended claims can represent $ 28 billion in benefits if they follow the trend cited by the payment authorities, an average of $ 20,000 per claim.
EDD announced the suspensions on Sunday and said those whose claims were suspended were notified by email or regular mail.
“They are being notified of what information will be needed to verify identity or eligibility for payments to resume,” said Levy. “If no official response is received, the claims will be canceled.”
Legislative officials say they are being informed by EDD that instructions to reactivate claims are being sent to claimants about a week after the suspension. After that, officials say, it should not take more than three weeks to submit documents that verify eligibility and for EDD to lift the suspension.
State Sen. Mike McGuire (D-Healdsburg) said the threat of fraud was real, but noted that EDD “over corrected” and that his office was flooded with calls from panicked constituents.
“Casting this wide network and suspension of payments to law-abiding Californians are affecting the lives of tens of thousands of innocent residents struggling to pay their rent and put food on the table, ”said McGuire on Thursday.
The suspensions were ordered as the EDD prepared to begin sending new, weekly $ 300 supplementary unemployment benefits authorized by a recent Congressional action.
Irene Flores of Los Angeles, who was a Lyft driver before the pandemic, said she was notified that her application was suspended.
Flores said he applied for unemployment insurance for the first time in March and twice had to produce documents to verify his identity. Then, on New Year’s Eve, she received a notice from EDD that her order was being suspended again.
“It’s worrying,” said Flores, “because there is no need for my account to be pending for the third time when I sent all the documents they asked for and they checked them.”
The suspension of unemployment insurance meant she was unable to pay her January rent, Flores said.
Anita McLaughlin, who lost her job at an executive recruiting firm in March, was also notified that her application was suspended.
She called EDD twice last week, waiting an hour and 25 minutes before the first call was disconnected without connecting to a representative. McLaughlin said she was on hold for 3 and a half hours during the second call and spoke to three people, including a supervisor, who were unable to help her resolve her complaint.
Her attempts to send documents to the EDD website to verify her identity have been unsuccessful, she said on Thursday.
“This has been a very stressful time and EDD has not helped,” said McLaughlin, who had to move with his sister in El Dorado Hills, near Sacramento, due to the financial difficulties caused by the COVID-19 pandemic.