Michigan unemployment benefits delayed due to stimulus package timing
Some Michigan unemployment insurance payments will take longer than usual due to the delayed timing of the federal coronavirus relief package and government spending bill signed into law by President Donald Trump Sunday evening, the state's Department of Labor and Economic Opportunity said Monday.
The delay will be temporary and claimants will be made whole when new unemployment insurance extension programs approved by Congress are implemented, the agency said in a press release. Only claims under federal extension programs — the Pandemic Unemployment Assistance (PUA) and Pandemic Emergency Unemployment Compensation (PEUC) programs — will be affected.
"Michigan, like all states, must wait until guidance is issued by the U.S. Department of Labor before it can begin processing the benefits provided under the new legislation," the release said.
That will require updates to the state's unemployment insurance system, but the agency said it "is making program adjustments with what information is available and will work tirelessly to implement any remaining changes as soon as it can in order to get benefits out the door as quickly as possible."
A department spokesperson said officials will have an estimate of how long payments will be delayed and when regular payments will resume once they receive guidance from the federal government. Supplemental unemployment benefits nationally are expected to be delayed at least one week due to the timing of aid legislation.
Congress passed the stimulus package after months of debate early last week with the approval of Trump's Treasury Secretary Steven Mnuchin.
Trump then delayed signing the bill for days, arguing it failed to provide large enough direct payments to Americans and provided too much aid to other countries. He signed it on Sunday, just before a Monday night deadline that would have shut down the federal government.
The package will put billions of dollars into vaccine distribution, school funding, small business aid and more. While the president avoided a government shutdown, his signature came after some unemployment insurance measures had already lapsed over the weekend.
With the passage of the pandemic aid package, additional unemployment insurance payments of $300 per week will be extended from Dec. 27 through March 13, 2021 and provisions that allow individuals to qualify for unemployment for up to 24 weeks rather than 13 through April 5.
The package also extends an expanded unemployment insurance program first put into place in March under the first federal coronavirus relief package that covers self-employed workers, contract workers and freelancers. That program will also end April 5 and stop taking applicants on March 14. New and existing claimants now have to provide documentation to show employment (rather than self-certification) beginning at the end of January.
The unemployment insurance extensions will "bring much needed relief to nearly 700,000 Michigan workers who are currently receiving benefits" under the programs, Michigan Unemployment Insurance Agency acting director Liza Estlund Olson said in a statement.
But Rep. Dan Kildee, D-Flint, said on the House floor Monday that Trump's delayed decision to sign the coronavirus legislation was a major factor in causing a disruption in benefits.
"The American people are struggling. We hear from them every single day and they need this relief now," he said. "That delay had consequences. It hurt families. Caused greater uncertainty and, in some cases, caused people to lapse their benefits."
A record number of Michigan residents have used state and federal unemployment benefits amid the pandemic, which has caused the largest economic recession since the Great Depression. A total of $26 billion in unemployment benefits have been paid out to 2.2 million claimants in Michigan since March.
Michigan’s unemployment insurance agency has come under intense scrutiny during the pandemic. The agency had issues meeting demand for claims and some residents didn't receive payments for months as the agency tried to work through its backlog.
Former Director Steve Gray stepped down from his post leading the agency in November with little explanation. Gray wrote in a letter at the time that the agency had paid out nearly seven years’ worth of benefits to the people of Michigan in just seven months.
Later that month, an independent forensic report found that the agency’s attempts to speed up claims processing created weaknesses for fraud that could have led to “hundreds of millions” of dollars in fraudulent claims being paid out.