PHOENIX — Arizona has hired a firm to process the jobless claims of those who qualify only for special federal aid, including part-timers, independent contractors and others ineligible for the regular state unemployment benefit.
But it will take weeks before their checks are in the mail — putting Arizona behind at least 10 other states already making the federal payments.
The state has to construct such a system from scratch, said Department of Economic Services officials. It won’t be launched until the week of May 12. At that point, payments will begin, along with retroactive benefits.
The DES announced Friday that it has contracted with Geographic Solutions to set up a pandemic unemployment assistance program for the state.
The move comes nearly a month after Congress approved the Coronovirus Aid, Relief and Economic Security Act. One provision of the $2.2 trillion stimulus package creates this new pandemic unemployment assistance program, with its benefits of $600 a week.
The DES is already providing the additional federal cash to unemployed people who are eligible for the regular state benefits of up to $240 a week.
But the federal law also provides the $600 benefit for those who don’t qualify under the state program. And that required the DES to develop an entirely new system.
There was no way to simply piggyback it on to the current computer programs that handle the state benefits, said Michael Wisehart, DES deputy director of employment and relief services.
There are entirely different eligibility criteria, he said.
For example, Arizona has financial requirements to have earned enough money in the past four calendar quarters. Those include having worked the equivalent of at least 30 hours a week at minimum wage for one of those quarters.
Also ineligible for the state program are those who have been self-employed, including workers in the gig economy and independent contractors. And those seeking only part-time work or those who have exhausted the 26 weeks of state benefits also do not qualify.
Deciding on a new system was necessary, and DES Director Tom Betlach said it made more sense to contract that out rather than do it in-house.
“When you get some of these older systems, doing the programming and making the time to do that just becomes too expensive an exercise,” he said.
There’s also the fact that the current staff is busy trying to deal with the nearly 420,000 Arizonans who have sought first-time unemployment benefits since Gov. Doug Ducey shuttered many “nonessential” businesses and issued a directive for residents to stay home as much as possible.
The U.S. Labor Department says 10 states already have implemented their programs and started making payments, CNBC reports. It also says the National Employment Law Project found another three states that have initiated pandemic unemployment assistance payments, with two more in the process of launching.
Wisehart, however, said there are reasons that some states, such as Texas, are further along.
“The advantage that a state like Texas has — it’s an unfortunate advantage — is Hurricane Rita, Hurricane Katrina,” he said.
“They’ve had disasters in the past,” Wisehart said, meaning they also had systems set up to handle emergency unemployment benefits.
“They’re able to repurpose infrastructure available to them having had those disasters,” he said. “They are able to be a little bit farther along in this cycle than we are.”
Things are different here, Wisehart said.
“Arizona is unique in that we haven’t had a disaster of this magnitude in the past,” he said. “And so we’re needing to stand this up more from scratch.”
One immediate issue is there are people who applied for unemployment benefits after the virus and its economic effects hit, but were simply turned down because they didn’t meet the state eligibility standards, like the work requirements, Wisehart said.
Now, he said, the DES will go back and work with those people to reconstruct their application and see if they are entitled to retroactive $600-a-week payments under the pandemic unemployment assistance program.
Wisehart said the federal program creates new hurdles for the state in determining eligibility.
Take, for example, someone who has been self-employed or is a contract worker.
He said the DES will get whatever documents are available. But some of what the department will be relying on is the sworn statement of the applicant. To the extent possible, the DES will compare those statements with available data sources.
“We’re working with our federal partners and other state partners to figure out best practices in getting that information and making sure that people understand their responsibilities in reporting to us, and ferreting out any fraud that we can,” Wisehart said.
The ultimate fallback may come at some future point when new documents become available and the state can determine if people have made fraudulent claims, he said.
In that case, “they’re going to have to pay those benefits back.”
The governor’s order shutting down parts of the economy expires at 11:59 p.m. Thursday.
Ducey has said he is still studying data on the spread of the virus before making any decision whether to lift the restrictions in whole or in part, or extend them.
At last count, Arizona has logged 6,045 confirmed cases of COVID-19, with 266 known deaths, including 17 reported just on Friday. Two hundred of the deaths were among those 65 and older.