Ten months into a COVID-19 pandemic that put many out of work, the state unemployment agency has suspended payments on 1.4 million benefit claims, angering jobless Californians as it attempts to rein in rampant fraud.
The mass suspension is the latest controversy for an agency that has come under fire for jammed phone lines, computer glitches and operational problems that have left hundreds of thousands of frustrated Californians without financial help, many for months.
State lawmakers say their offices have been flooded with desperate calls from constituents who don’t understand why their jobless benefits have been cut off by the state Employment Development Department.
“I am angry and in disbelief that EDD continues to fail at its one and only job — sending benefits to those in need,” said Assembly member Miguel Santiago (D-Los Angeles). “Suspending benefits during one of the highest unemployment rates and right before bills are due is cruel especially during a pandemic.”
The state agency has processed an unprecedented 18.5 million claims and paid out more than $110 billion in benefits since the pandemic began in March 2020, shuttering many businesses and putting people out of work.
At the same time, authorities are investigating the possibility that more than $4 billion has been paid out by the state agency on fraudulent claims, often filed by criminals using stolen identities.
“As we approached the end of the year and the beginning of newly extended federal unemployment benefits, the EDD applied additional fraud detection screening to existing claims established during the pandemic,” said Loree Levy, a spokeswoman for the agency. “About 3.5 million of them were deemed potentially fraudulent.”
As a result, EDD officials have in recent days suspended 1.4 million claims until the recipients can verify their identity and eligibility for benefits, Levy said. Another 1.9 million claims were disqualified after the EDD determined they were not eligible.
The suspended claims could represent $28 billion in benefits if they follow the trend cited by authorities of payments averaging $20,000 per claim.
The EDD announced the suspensions on Sunday and said those whose claims were suspended were being notified by email or regular mail.
“They’re being notified about what information will be needed from them to verify identity or eligibility in order for payments to resume,” Levy said. “If no official response is received, claims will be canceled.”
Legislative officials say they are being told by EDD that instructions for reactivating claims are being sent out to claimants about a week after suspension. After that, the officials say, it should take no longer than three weeks to submit documents verifying eligibility and to have EDD lift a suspension.
State Sen. Mike McGuire (D-Healdsburg) said the threat of fraud was real but noted that the EDD “over-corrected” and his office had been inundated with calls from panicked…
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