Ten months after a COVID-19 pandemic that left many people out of work, the state agency demanded payments on 1.4 million benefits, angering unemployed Californians for trying to curb ominous fraud.
The mass suspension is the latest controversy for an agency that has come under fire due to stuck phone lines, computer errors and operational problems that have left hundreds of thousands of frustrated Californians without financial help for many months.
State legislators say their offices have been flooded with desperate calls from voters who do not understand why their unemployment benefits were developed by the state’s Department of Employment.
“I’m angry and incredible that EDD is still failing its only job – to send out benefits to those in need,” said Miguel Santiago (D-Los Angeles). “The suspension of benefits during one of the highest unemployment rates and payable right before bills is cruel, especially during a pandemic.”
The state agency has processed an unprecedented 18.5 million claims and paid out more than $ 110 billion in benefits since the pandemic began in March, closing many businesses and putting people out of work.
At the same time, authorities are investigating the possibility that more than $ 4 billion has been paid out by the state agency for fraudulent claims, often lodged by criminals using stolen identities.
“As we approach the end of the year and the beginning of the newly extended federal unemployment benefits, the EDD applied additional fraud detection to existing claims lodged during the pandemic,” said Loree Levy, a spokeswoman for the agency, said. “About 3.5 million of them are considered fraudulent.”
As a result, EDD officials have suspended 1.4 million claims in recent days until recipients can verify their identity and be eligible for benefits, Levy said. An additional 1.9 million claims were disqualified after the EDD determined they were ineligible.
The suspended claims could represent $ 28 billion in benefits if they follow the government-named trend of an average of $ 20,000 per claim.
The EDD announced the suspension on Sunday, saying those whose claims have been suspended will be notified by email or regular mail.
“They are informed of the information required of them to verify their identity or suitability to resume payments,” Levy said. “If no official response is received, claims will be canceled.”
Legislators say the EDD tells them that instructions for reactivating claims are sent to plaintiffs about a week after suspension. Thereafter, officials say it should not take more than three weeks to submit eligible documents and to suspend the EDD.
State Senator Mike McGuire (D-Healdsburg) said the threat of fraud was real, but noted that the EDD was ‘over-corrected’ and that his office was flooded with calls from panicked voters.
‘Role distribution “This wide net and the suspension of payments to law-abiding Californians are having an impact on the lives of tens of thousands of innocent residents who are struggling to pay their rent and put food on the table,” McGuire said on Thursday.
The suspensions were ordered as the EDD prepared to launch new weekly additional $ 300 unemployment benefits approved by recent congressional action.
Irene Flores of Los Angeles, who was a manager of Lyft before the pandemic, said she was notified that her claim had been suspended.
Flores said she first applied for unemployment benefits in March and had to submit documents twice to verify her identity. On New Year’s Eve, she received a notice from the EDD that her claim was being suspended again.
“It’s disturbing,” Flores said, “because my account does not have to be filed for the third time when I have submitted all the documents they have requested and verified.”
The stalemate in unemployment benefits meant she could not pay the January rent, Flores said.
Anita McLaughlin, who lost her job at an executive recruiting firm in March, was also notified that her claim had been suspended.
She called EDD twice last week and waited an hour and 25 minutes before the first call was disconnected without calling a representative. McLaughlin said she suspended 3 hours during the second call and spoke to three people, including a supervisor, who could not all help solve her claim.
Her attempts to upload documents to the EDD website to verify her identity were unsuccessful, she said on Thursday.
“It was a very stressful time and EDD did not help,” said McLaughlin, who had to move in with her sister in El Dorado Hills near Sacramento due to the financial hardship caused by the COVID-19 pandemic.