Oregon will pay some unemployment claims before final approval

By Kate Davidson (OPB)
July 31, 2020 7:22 p.m. Updated: July 31, 2020 10:36 p.m.

Amid major delays, the Oregon Employment Department plans to pay some claims proactively - even before adjudication ends.

Tens of thousands of Oregonians have filed unemployment claims that are mired in a monthslong review process known as adjudication.

Now, the Oregon Employment Department will begin paying some of those claims before adjudication is complete.

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The new policy was outlined in a memo sent to employment staff – and obtained by OPB – on Thursday. By Friday, the department had a public name for it: “Benefits While You Wait.”

To qualify, claimants stuck in adjudication must apply for a second benefits program, Pandemic Unemployment Assistance. The agency must deem them likely to be eligible for PUA in the event their regular claim is denied.

“We’re going to go ahead and pay them their regular unemployment benefits while we do the adjudication process,” OED acting Director David Gerstenfeld said. “If at the end of the adjudication process we conclude that they’re not eligible for regular unemployment, but they can get PUA benefits, we’ll essentially just be switching them from one program to the other.”

Adjudication is the agency’s process for resolving certain claims issues, such as whether a person’s reason for leaving a job disqualifies them from collecting unemployment insurance benefits, often referred to as UI.

For tens of thousands of desperate Oregonians, adjudication has become a black hole.

In recent weeks, Gerstenfeld has said that adjudication can delay a claim by 12-14 weeks. The department memo announcing the policy change Thursday put the wait time higher: four months.

“The current wait time of 16 weeks is counter to the agency’s core mission of accurate and timely payment of UI benefits,” employment official Lisa Schriever wrote to staff. “The pandemic brought about workloads never before experienced in UI.”

In the face of that crippling delay, the agency is launching Benefits While You Wait, which it describes as a “workaround.”

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The workaround depends on the backstop of PUA benefits, which were created by the federal CARES Act as a safety net for a range of people who do not qualify for regular unemployment benefits. That includes independent contractors, as well as people who have run out of regular benefits or have not worked enough hours to qualify for them.

Gerstenfeld said only a subset of people with regular unemployment claims in adjudication will be eligible for payment while they wait. The department’s basic message is: Don’t call us, we’ll call or email you.

“We’re going to reach out to people that may be eligible,” Gerstenfeld said. “Because what we don’t want to do is have lots of people filling out applications for something that won’t help them and that just create more work in the pipeline that slows down our ability to get benefits out.”

There are some scenarios that disqualify people from being eligible for both regular UI and PUA. In addition, claimants do not qualify for PUA if they are out of work for reasons unrelated to COVID-19.

In the near-term, thousands of Oregonians could begin to receive payment while their claims await adjudication. Almost 6,000 people in UI adjudication already have PUA applications in the pipeline.

“We will begin reviewing their applications, and if they have a COVID-19 impact reason and date, we will release their regular UI benefits,” Schriever wrote in Thursday’s all staff memo.

The new policy does come with a risk for claimants: the risk of being overpaid and having to return money to the state.

When a person is paid benefits to which they are not entitled, Oregon generally tries to recoup that money. Early in the pandemic, OED waived the collection of overpayments that are not considered a person’s fault.

A person can be considered at fault, however, for overpayments resulting from mistakes or misinformation – willing or not.

“If they did give us some inaccurate information, though, then under Oregon law that means that it’s something we would attempt to recover from them,” Gerstenfeld said.

Recovery can take the form of withholding future benefits, arranging payment plans and – in cases of willful misrepresentation – ultimately garnishing wages and tax refunds.

Gerstenfeld said claimants will be notified of the risk of overpayment in the Benefits While You Wait program – a risk he described as small.

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