Unemployment freeze traps valid claims in a red tape nightmare

KTVU - Although the Employment Development Department has distributed unemployment benefits to over a million Californians, many taxpayers have not received benefits they’re eligible for and need to survive nearly a year into the pandemic. Some unemployed workers with legitimate claims have had their accounts frozen by the department, sometimes for months, as part of an anti-fraud crackdown.

The EDD implemented a new identity verification tool called "Id.me" in October, following the department’s two-week closure to address backlogged claims and fraud. The department reported suspending payment for 1.4 million accounts until those people successfully prove their identity.

But the current verification measures are also inappropriately burdening innocent, unemployed taxpayers caught up in the fraud investigation. When an unemployed person’s application is flagged, it could mean that they enter an administrative nightmare with no money, and no end in sight.

Such is the case for Ashley Hurkmans, an indefinitely furloughed chef and caterer, who hasn’t gotten consistent benefits since she applied a year ago, due to a never-ending slew of clerical problems. Her EDD account is currently on hold due to an identity verification issue.

"There are people living on the streets, because they couldn't get through to EDD, because they couldn't get help with the fraudulent account problems," Hurkmans said. "People who were barely getting enough money to just survive, and they're being kicked out."

Hurkmans said that the first few months of waiting for benefits from the EDD were tolerable, since she had savings. But after a year with no income, she was forced to move back home with her family while she frantically applies to jobs she doesn’t hear back from. 

"To go from a strong, independent person to having to rely on everyone else--it sucks," she said. "It really sucks, because I like being able to provide for myself. But I can't. I can't go out and just find a job."

Hurkmans described spending exorbitant amounts of time trying to get help from EDD employees. She said that they were better equipped to placate her, than to provide concrete help. They "kind of make you feel better, so you wait longer," she said.

"I’m calling in and crying," she said. "I'm doing all these things. I'm trying to make it better. But no one's listening."

Hurkmans is not alone in being unable to get a new job, or in her account being frozen.

Ariel Sides of San Diego, who moved to Oregon during the pandemic, also had her account frozen for 5 months due identity verification. She’s had a variety of issues with her account, despite consistent, persistent outreach for help through the EDD and her local assemblyperson.

Sides said that she received scant funds, intermittently, for the entire time she’s been unemployed. She was initially misclassified as a gig worker, and received a much smaller amount of money than she was eligible for.

"They also have wages in their system for me, for months where I was totally unemployed, and then don't have wages for months when I was reemployed," she said.

Sides said that when she briefly got a lump sum of benefits, she was happy to pay off past-due bills. But now that her account is frozen again, and she doesn’t know when she will receive benefits, she’s "rotating what bills we can pay every month."

She needs the money to pay for a palate surgery for her son, whose teeth started growing on the roof of his mouth. Her son’s state dental insurance won’t cover the cost of that medically necessary procedure, so it will have to come out of her and her husband’s thin wallets.

Michele Evermore, a senior analyst at the National Employment Law Project, said that the number of people who had their unemployment accounts flagged by the EDD is down since its height over the summer.

But, she said that as of early January, over 200,000 eligible unemployed people in California have their applications flagged, which could mean that they can’t access their money.

"People are getting cleared, but the people who aren't, generally are people who've had multiple flags…they had a reason to quit that caused a flag, and maybe their name or address didn't match up," Evermore explained. "Or their earnings didn't match up with what their employers reported."

She said that when an applicant has "multiple flags" it will take the person longer to move through the unemployment insurance system.

An EDD spokesperson wrote in a release last week that, "to help strengthen fraud prevention measures, EDD has applied further screening to 9.7 million unemployment claims established during the COVID-19 pandemic resulting in more than 1.4 million claims identified as potentially fraudulent."

So, how many of the people whose claims are flagged, and accounts are sometimes frozen for months, are fraudsters, and not unemployed people who urgently need money?

A January EDD report says that from the first month of the pandemic to this month, 675,366 claims were deemed ineligible; that could mean they were fraudulent, improperly filed or outside the bounds of eligibility. The total number of overall claims received is not explicitly stated in the report, but they paid 10,362,176 unemployment claims.

The January release says that 19.1 million claims have been processed by the EDD during the pandemic for unemployment benefits.

It is clear that, overwhelmingly, most claims are filed by eligible, unemployed people, not fraudsters. Though there has been well-documented fraud at the EDD this year, Evermore said that the fact that "states are so over-focused on fraud" in welfare programs is nothing new.

When states like California hold up, freeze or deny peoples’ claims this way, people who are already on the margins are harmed. Unemployment funds, even though they don’t meet the cost of living in any state, can mean the difference between going hungry, keeping housing and getting medical care.

If your claim is held up for an identity or clerical issue, there are actions you can take, Evermore said. She recommends checking out local legal aid centers, whose attorneys have often become experts in navigating unemployment insurance.

Facebook groups and other social media can be a good place to connect and to organize with fellow unemployed folks. It could help your claim to contact your local assemblyperson, too.

"If you've either been flagged and held up for a long time, or you just never got your benefits in the first place, you should know that you do have a legal right to get a benefit within two to three weeks," she said. This right is referred to as receiving benefits "when due" under the Social Security Act.

"Understand that you do have rights in this system, and fight for those rights," she said.

Caroline Hart is a writer and producer at KTVU. She covers unemployment, inequality and the economy. She can be reached at caroline.hart@foxtv.com.