Many out-of-work Arizonans will be trying to scrape by on just $240 this week once a federal program aimed at helping those who don’t qualify for unemployment benefits runs out of money before federal lawmakers pass new relief measures.
State officials are unclear on when the Lost Wage Assistance program—which adds an extra $300 of federal money to the state’s unemployment maximum—will end. They anticipate it will be soon.
Arizona Department of Economic Security Director Michael Wisehart was unable to give an exact date on when LWA would be exhausted during a recent Zoom meeting with reporters. The director could only confirm DES would have little notice when it happens and the program will end “abruptly.”
Wisehart was able to give advice to those potentially affected by the program’s commencement.
“Getting the word out that individuals need to continue to plan, need to continue to work with their congressional delegation to express the need that is going to continue to exist in Arizona as we move forward,” Wisehart said.
LWA is funded through an emergency FEMA grant President Trump approved after the White House and congressional Democrats were unable to make a deal on a new coronavirus relief package to extend the previous $600 given as a part of CARES Act’s Pandemic Unemployment Assistance program, which ended on July 31. Essentially, LWA funding allows the PUA program to continue and those funds are distributed by DES.
Federal officials expected LWA funds to be depleted in five weeks, depending on how many states took advantage of the program. Arizona was the first state to use the supplemental unemployment funds in early August. Now, nearly every state is using the $44 billion program and the funding is retroactive to Aug. 1.
A sixth week of funding was approved to cover Arizonans who lost wages between the week of Aug. 30 and Sept. 5, however Wisehart said he thinks it would be a “challenge” for the state to continue receiving funds moving forward.
Once the extra $300 in LWA benefits run dry, Arizona’s unemployed will be left to survive on the state’s unemployment maximum payment—$240 a week or less and that is if you qualify.
Those who are self-employed, gig workers or underemployed typically don’t qualify for the state’s unemployment insurance program, said Grand Canyon Institute Research Director Dave Wells. PUA has been a life-saver for many Arizonans, said Wells.
“The key thing to remember about Arizona is unemployment benefits are inadequate,” Wells said. “A lot of people in Arizona would not be able to survive without that $600 supplement that ended in July. Pandemic assistance filled a big time gap in the state.”
The researcher tells an anecdotal story of a substitute teacher he knows to illustrate how detrimental PUA has been for a considerable amount of Arizona’s workforce. Since the teacher is a substitute, he is currently unemployed after many school districts moved to online schooling due to the pandemic, said Wells.
“The teacher fell $600 over the amount needed to qualify for unemployment benefits, but he got Pandemic Unemployment Assistance,” Wells said. “(PUA) allows people with sporadic work histories, gig workers and the self-employed who don’t usually receive unemployment the extra help they need.”
If you are able to receive unemployment in the Grand Canyon state, don’t expect too much. While the state comes in as the second lowest in offering unemployment benefits to its constituents, Arizona’s benefits are actually the lowest in the country when adjusted for cost of living, according to Wells.
Wells said he expects the president will allocate additional funding to LWA on a week-to-week basis until the federal—or state—government takes action.
On a state level, benefit disbursement is being slowed down by a wave of suspected fraudulent PUA claims, leaving scores of Arizonans waiting on relief. More than 90,000 PUA claims were put on hold until they were able to be verified and then paid out the first week of September.
“A lot of people have gone weeks waiting to get benefits. Even though you might get a big check, somehow a person is expected to survive that time without income,” Wells said. “I’m sure it’s not a pleasant mental or financial experience.”
The Community Food Bank of Southern Arizona is expecting a significant rise in the number of recipients should unemployed benefits drop to $240 a week, said community food bank CEO Michael McDonald.
At the start of the pandemic the community food bank saw four times the amount of new users, said McDonald. However, that number dropped once PUA and unemployment benefits began, the CEO said.
“There’s been cycles to this since the start of the pandemic. It’s been a function of what resources people are able to get,” McDonald said. “Are they able to get unemployment? Do they qualify for federal benefits like SNAP or food stamps?”
Without adequate benefits, McDonald believes the need for food security could jump to levels they experienced in March.
“If people don’t get back to work or their income decreases because federal benefits decline, we know demand is going to grow,” McDonald said. “We’re expecting it to go back to what we saw at the start of the pandemic.”
Should community need skyrocket in upcoming weeks, McDonald said the community food bank has enough supplies to keep individuals and families afloat during this time and well into the future.
“We’re in it for the long haul right now because of the economics of COVID-19, regardless of what public health indicators are telling us about places reopening,” McDonald said. “Thankfully, we’ve had a good supply of food for a while. I think we’ve got a good cushion in place and more food is coming in.”