Dear Neighbor,
My last newsletter included Boston Globe articles explaining the problems with "clawbacks" and "overpayments" in unemployment benefits.
This one tells about broader problems in the unemployment system, how my staff helped individual constituents, and what I have done as Senate chair of Labor and Workforce Development to solve problems.
UNEMPLOYMENT INSURANCE:
IMPORTANCE, SCALING UP, PROBLEMS
We need to recognize the incredibly important role the unemployment system and the federal supplements have been in keeping individuals and families afloat. The payments helped not only recipients but the businesses where they spent those funds, the landlords who received their rent payments, and the entire economy.
Millions of people in Massachusetts received a total of $33 billion in benefits in the past two years - the vast majority from federal funds. (In the previous year, 2019, 400,000 people received benefits of $1.4 billion total.) Building the systems to serve so many more people, mostly in new federal programs, required hard work and increasing the staff at the Department of Unemployment Assistance from 200 to 2000. (graph source)
The expansion also resulted in hundreds of thousands of people facing problems in the system. Many of them waited for months to receive benefits because they made mistakes in submitting information during a confusing process, or the department made mistakes, or the federal government changed requirements.
Starting in April 2020, international organized crime used fraudulent identities to file claims. Along with many others, I learned that someone had filed an unemployment claim in my name. New systems had to be established, which identified and denied almost 278,000 fraudulent claims, mostly in federal programs.
HELPING CONSTITUENTS WITH BUREAUCRACY
Thousands of people tried unsuccessfully to file their claims and turned to legislators for assistance after waiting for months for the assistance they deserved and desperately needed as they coped with lost income during the pandemic. Every legislative office was inundated with requests for help, and our staffs often succeeded in resolving their cases with the Department.
Rachel Clinton, my amazing constituent services director, helped hundreds of people make their way through confusing processes in order to finally get their benefits. For example, this month, she continued to help a constituent through 18 months of hearings, appeals, and other delays such as a "Notice of Remand to Central Adjudication on the matter of Benefit Calculation that was accidentally dismissed due to a processing ‘glitch’ within the Adjudication department." (photo by Peter Alfred Hess)
Now hundreds of thousands are being asked to repay those benefits - even though they did nothing wrong. Again, Rachel and other constituent services legislative staff are working to help resolve those cases. It seems wasteful to have hundreds of people answering the phones, unable to help and sometimes giving incorrect information, so that people have to turn to legislative staff who then call DUA back. But we're glad when it works!
ASKING FOR A PAUSE
Just this month, Rep. Josh Cutler and I, co-chairs of the Labor and Workforce Development Committee, wrote to Labor Secretary Rosalin Acosta, asking the administration to pause collection on these overpaid benefits while we work on equitable solutions. Here are reports from the Globe and Herald. This WGBH report includes the story of one of our constituents whom Rachel helped.
Before continuing to demand repayments, the state should consider new federal guidance allowing more waivers. The state is requiring repayment from hundreds of thousands of people, many of whom did nothing wrong, and needed and spent the money. I think the administration should change the regulations, which in my opinion don't meet the standard in both federal and state law. The law says that overpayments may be waived if the claimant was not at fault “and where, in the judgment of the commissioner such recovery would defeat the purpose of benefits otherwise authorized or would be against equity and good conscience."
All of the money that comes from people repaying federal benefits will be sent back to Washington, which means it will leave the state's economy.
LEGISLATIVE ACTIONS
As Senate chair of the Committee on Labor and Workforce Development, I have focused on the unemployment system during this incredible time. All my work on unemployment, and on labor generally, is based on the invaluable expertise, initiative and collaboration of my chief of staff, Matt Hartman.
(For more on our work on unemployment, see my March newsletter.)
In March 2020, I worked with the administration to temporarily end the 1 week waiting period for receiving benefits for unemployment during the emergency. (see more here)
In May 2020, I worked to end the cap on the dependency credit for unemployment beneficiaries with large families. This bill also limited tax impacts on employers for unprecedented levels of claims. (see more here.)
In October 2020, I filed a bill to extend Lost Wages Assistance benefits to 15,000 of the lowest income unemployment beneficiaries who would otherwise not have qualified because of low wages and would also have lost out on the federal supplements. Extraordinarily, the bill passed the legislature within 7 days. (see more here)
In August 2020, I worked to help authorize $165 million dollars for a new unemployment online system. We also created an advisory council of stakeholders to ensure development of an inclusive and accessible system.
In April 2021, we passed the governor’s bill to pay for pandemic unemployment claims by authorizing up to $7 billion in bonds. As part of the act, I succeeded in including the creation of a commission to examine the long-term finances of the UI system and recommend permanent financing solutions.
In May 2021, I worked to pass legislation to limit the tax impact of unemployment taxes on businesses after the administration miscalculated rates.
For months, the administration did not tell us how much money was in the Unemployment Insurance Trust Fund, even though the law requires monthly reports. In November, Matt Hartman found federal reports showing that we did not need to bond anywhere near the previous estimate of $7 billion. In fact, it appeared we had a positive balance in the Trust Fund.
In November, we added $500 million in ARPA funds to the Trust Fund. I asked not to spend even more funds until we had more information. You can watch my speech with more information here (part 1 at 1.04). Bruce Mohl started covering the issue in Commonwealth Magazine on Nov. 10, saying the trust fund deficit may have vanished, and followed up on Nov. 15 and 29, continuing to ask for answers.
In December 2021, I joined Sen. Michael Moore, chair of the Senate Committee on Post-Audit and Oversight in a hearing about the unemployment system, where we learned lots of new information. You can watch the hearing here.
Also in December, Sen. Susan Moran and I passed a proposal requiring the Department of Unemployment Assistance to notify people in overpayment of their right to seek a waiver.
On New Year's Eve, we received a report from consultants KPMG on the actual status of the Trust Fund. It appeared to conclude there would be a positive balance after reconciling all accounts, paying off federal loans and other obligations, and adding the $500 million appropriation.
In early January 2022, Chair Cutler and I asked Sec. Acosta to consider paying back federal loans to avoid increasing interest payments. At that time, we had accumulated over $13 million in interest owed; we now owe 17,765,797.88?. (This has not yet happened.)
In January 2022, I proposed a successful amendment to extend the appeals deadline for unemployment determinations, appropriated $1 million for a public notification campaign on overpayments, and required administration to give detailed breakdown of the number of people in overpayment and other related information. The extension was important because many people missed deadlines because they were back at work and stopped checking their unemployment account. You can watch my speech about overpayments here (part 2 at 1.17).
Meanwhile, the Unemployment Trust Fund Solvency Commission has been meeting and researching the status of the Trust Fund, and holding many meetings to explore solutions. You can learn about our work here.
The Labor and Workforce Development Committee held 12 hearings on 230 bills, and reported most of them. You can learn about the committee's work, and watch the hearings here.
One good thing about the legislature meeting remotely is that recordings of all our sessions and all our hearings are available online. And many more people participate in hearings. One recent hearing had more than 100 people testify from across the state.
Stay safe, stay involved, and stay in touch,