As many as 15,000 Wisconsinites will be excluded from a Trump administration supplement to unemployment insurance because of a requirement that recipients must be receiving at least $100 in weekly unemployment benefits, according to the Wisconsin Department of Workforce Development.
The Lost Wage Assistance program, created by the Trump administration on Aug. 8, tacks on $300 in weekly benefits to those receiving regular state-level unemployment on two conditions: that they receive a minimum of $100 in weekly unemployment benefits and that they certify they're unemployed completely or partially due to the COVID-19 pandemic.
Wisconsin's application for the program was approved by FEMA on Sept. 2, but DWD Secretary Caleb Frostman said he expects payments won't get to unemployed people in Wisconsin before October while the department works to build the technical infrastructure for the program. If that estimate proves accurate, it will mean out-of-work Wisconsinites will have gone two months or more with only state-level unemployment benefits, which max out at $370 a week.
And because the program requires an individual to be getting at least $100 in weekly benefits, some experts worry that the program will not reach recipients who are the most in need.
Who is affected by the $100 requirement?
DWD communications director Ben Jedd said that recipients of unemployment benefits who get less than $100 a week have an income of less than $10,000 a year. However, he noted that some of those recipients may have other sources of income from jobs not covered by unemployment insurance, such as those who are self-employed or who work in the gig economy.
Michele Evermore, an expert on the unemployment insurance system with the left-leaning National Employment Law Project, said she's particularly worried about people in the food service industry and tipped workers.
"I particularly worry about food service workers and people who rely largely on tips," Evermore said. "They may have enough W2 income to qualify them for unemployment insurance, but it's going to be hard for them to certify how much they earn besides that."
Gary Burtless, an economist at the Brookings Institution, pointed to research from the California Policy Lab that found that nearly 200,000 unemployed Californians won't receive the LWA supplement because of the $100 cutoff. In an analysis, the Policy Lab found that young people were disproportionately affected by the threshold.
"The (young people affected) may very well be living with a parent or two parents," Burtless said. "So maybe it's not a terrible hardship for those youngsters."
But researchers also found that the vast majority of those ineligible due to the threshold were adults over the age of 20, and more than 60% were women.
"I can imagine a lot of the people past 25 may be ... contributing importantly to the earned income of the family that the live (with)," he said. "And the fact that they are going to be cut off from this $300 per week (supplement) is going to represent a real hardship for a lot of those adults, some of whom have children, some of whom are the main source of labor income in the household that they live in."
In an interview with WPR on Sept. 1, DWD Secretary Caleb Frostman said he was concerned that the requirement meant that "the people that need that benefit the most won't be getting it."
Why require people to get at least $100?
The Trump administration has said that the $100 requirement was put in place in an effort to curb fraud and to ensure individuals who receive the LWA supplement were already qualified for an unemployment insurance program, according to The Washington Post.
Both Evermore and Burtless said they were confused by the claim that the requirement protects against fraud.
"When I read that I was scratching my head," Burtless said. "Why would you want to deprive the group of people who, in some respects, might ... be in the worst situation?"
Evermore said the assertion doesn't make sense to her because "most people who fraudulently apply for benefits, they apply for the maximum benefit. They impersonate somebody who would get the maximum benefit."
Both said the speed with which the program was put together could help explain the reason for the requirement.
Frostman said last week that the $600 federal supplement passed by Congress and which expired July 31 did not have the same threshold.
"That was another positive aspect of the prior ($600 supplement from Congress)," Frostman said. "If you were eligible for $1 of an (unemployment insurance) program whether that was federal or state, you got the (benefit). So ... it is a challenge with the $100 limit."
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