L&I pursuing loans to bolster UC trust fund
The state Department of Labor & Industry has a trust fund from which it pays unemployment compensation benefits. The fund, according to L&I secretary Jerry Oleksiak, “was well on its way to becoming solvent” by summertime – until the coronavirus pandemic started to overtake the commonwealth in mid-March.
As of Friday, about 80% of the $3.4 billion that was in the fund at the beginning is gone. An estimated $74.2 million remains.
To keep UC benefits flowing at a time they are dwindling, the department will have to rely on federal loans, which Oleksiak said it will do starting later this month.
The trust fund was the focus of L&I’s weekly virtual news conference Monday afternoon, five days after the Federal Emergency Management Agency advised the state that the Lost Wages Assistance program had ended. That program, established through an executive order by President Donald Trump, provides a $300 weekly benefit to workers in participating states who are fully or partly unemployed because of the pandemic.
Oleksiak said the loans that will boost the trust fund will be 0% interest and the state will request $800 million the first month, and $1 billion the second and third months. As for repaying them, the secretary said, “We will work with the governor’s office and the Legislature.”
FEMA, at Trump’s direction, administered the LWA program by using $44 billion from the Disaster Relief Fund. Pennsylvania got $2.4 billion, before being told by the agency Wednesday that LWA ended Sept. 5. Eligible claimants in Pennsylvania, however, can file for benefits for five weeks, beginning Aug. 1 through Sept. 5 – and will be paid retroactively in a lump sum.
LWA is separate from the state’s regular UC programs, none of which were affected by the federal program’s demise.
As he did last week, Oleksiak recommended that claimants “apply as quickly as possible” for LWA benefits before that funding source evaporates.
“The payment process started last week,” said Susan Dickinson, UC benefits policy director for L&I. Initial Pennsylvania claimants are expected to receive LWA benefits this week.
Labor & Industry reported that it has paid $26 billion in total benefits, $5 billion in regular UC.
L&I will have another weekly town hall at 1 p.m. Thursday. It is open to the public, by calling 833-380-0719 or live-streaming at https://access.live/PAlabor.