On May 26, 2020 the US DOL Inspector General released an Alert Memorandum identifying serious problems in interpretation and administration of the Pandemic Unemployment Assistance (PUA) program created in the CARES Act.

The primary concern identified is that US DOL’s interpretation that entitlement to PUA benefit payments may be based solely on a check the box self-certification by the applicant. The following are examples of COVID-19 related reasons that qualify individuals for PUA program benefits:

  • place of employment is closed as a direct result of COVID-19;
  • unable to reach place of employment due to COVID-19;
  • was scheduled to commence employment but does not have a job as a direct result of COVID-19;
  • was diagnosed with COVID-19 or has experienced symptoms and is seeking medical diagnosis;
  • providing care for a family or household member who has been diagnosed with COVID-19; or
  • a child or other household member for which the individual has primary caregiving responsibility is unable to attend school or another facility that is closed due to COVID-19.

Individuals who qualify for PUA per CARES Act § 2102 are eligible to receive weekly benefits equivalent to the state’s regular unemployment compensation plus an additional $600 weekly payment under CARES Act § 2104.

Commentary from the American Enterprise Institute (AEI) has highlighted significant policy and cost concerns. See

https://www.aei.org/poverty-studies/inspector-general-warns-new-federal-unemployment-program-at-significant-risk-of-abuse/

It is unlikely that Congress intended such an open ended “entitlement” that does not incorporate the documentation requirements of the regular Disaster Unemployment Assistance program or state unemployment compensation.

The wide open entitlement not only attracts fraud to the PUA program but increases state administrative complexity in determining whether an individual may be eligible to be paid regular unemployment compensation or PUA with respect to a week. The confusion is also likely to result in erroneous unemployment compensation determinations and payments as individuals “loop” from one program application to the other.

The self-certification should be addressed now by US DOL and/or Congressional action.