By Michael Quillen
The Lost Wage Assistance (LWA) will be administered by the states and territories through a grant agreement with the Federal Emergency Management Agency (FEMA)—grants can be applied for at grants.gov.
FEMA says the agency will not be administering the benefits directly to individuals, but rather the states and territories must distribute the funds through their unemployment insurance (UI) benefits system, as a supplemental payment. Administrative funding for the LWA program, including changes to existing UI systems to accommodate the program will be provided by FEMA.
The LWA program is funded using a 75/25 federal-to-state cost-share agreement, wherein the federal government pays 75% with a 25% match coming from the states. If stated wish to provide the maximum $400 benefit, they may only fund $100 of the amount provided by the Coronavirus Aid, Relief and Economic Security (COVID-19) Act or other state funds to maintain the 25% match. Conversely, states may use their funds that are currently being provided as regular state UI payments towards the state match, which will make eligible claimants able to receive the $300 payment from the federal government.
Even though several territories, such as American Samoa, Guam and the Northern Mariana Islands, do not have active UI systems, each is eligible to participate in the LWA program. Separate assistance will be given to these territories regarding the state matching requirements.
The LWA program is set to terminate no later than Dec. 27, 2020. However, the program may terminate earlier if any of the three become true:
- FEMA expends the $44 billion from the Disaster Relief Fund (DRF) account.
- The total balance of the DRF account decreases to $25 billion.
- Legislation is enacted by Congress providing supplemental federal unemployment compensation or similar compensation.
The secretary of labor is required to provide technical assistance to FEMA and state governors regarding implementation of the LWA programs. No mention is made of consultation or technical assistance to state legislators or legislatures who may ultimately need to change current state UI regulations to supply such benefits.
Eligible Claimants and Certification
States are required to develop a self-certification process that is in accordance with FEMA instructions to certify a claimant’s weekly benefits are accurate and assess the claimant’s unemployment status being as a result of or partially a result of COVID-19. Individuals collecting disaster unemployment assistance are not eligible for the LWA program.
LWA is payable for weeks of unemployment ending on or after Aug. 1, 2020, through weeks of unemployment ending before Dec. 27, 2020, contingent on sufficient balances remaining in the DRF. Accordingly, in states where the week of unemployment ends on a Saturday, the first week that LWA may be paid is the week ending Aug. 1, 2020. For states where the week of unemployment ends on a Sunday, the first week that LWA is payable is the week ending Aug. 2, 2020. States have until Sept. 10, 2020, to opt-in to the LWA program.
To successfully file and receive the lost-wage assistance (LWA) program grant, state governments must submit the following:
- Standard form (SF) 424: Application for Federal Assistance.
- SF-424A: Budget Information for Non-Construction Programs.
- Provide a weekly benefits and claimant projection for each category of benefits-eligible individuals.
- SF424B: Assurances for Non-Construction Programs.
- Grants.gov lobbying form.
- SF-LLL Disclosure of Lobbying Activities.
- Federal Emergency Management Agency Form 010-0-11: Individuals and Households Program-Other Needs Assistance (ONA) Administrative Option Selection that includes the correct selections for an ONA lost wages grant.
- New State Administrative Plan.
States can retroactively provide supplemental benefits to those eligible individuals beginning the week of unemployment ending Aug. 1, 2020.
Individual claimants must certify that they are fully unemployed or partially unemployed due to disruptions caused by the coronavirus. The certification process may be required on a weekly basis.
If a state wishes to pay the supplemental LWA payment of $400, it can. However, the total may not exceed the $400 threshold. If a claimant is denied supplemental benefits, states must use their existing policies and procedures for adjudicating appeals for those denied regular unemployment insurance benefits. States are also responsible for recovering improper lost wages payment benefits.
Michael Quillen is a policy associate in NCSL's Labor and Economic Development Program.