A surge in suspicious new claims filed late last week will stall payments to first-time applicants to a federal unemployment program for gig workers and independent contractors.
The unexplained increase in claims for the Pandemic Unemployment Assistance (PUA) is believed to be part of an ongoing fraud scheme, Pennsylvania Labor and Industry Secretary Jerry Oleksiak said during a media update Monday.
The payout delay will not impact Pennsylvanians who are receiving payments through the other unemployment program programs. PUA beneficiaries with prior approved open claims also are not impacted.
On Thursday and Friday the number of new PUA claims filed in the state jumped to more than 20,000, four times higher than the average number of weekly new claims filed since the coronavirus pandemic began in the state.
Most of the new claims were from out-of-state, one of the hallmarks of the PUA fraud, which prompted officials to flag them for further investigation, Oleksiak said.
The department has met with its third-party vendor and authorities to develop stronger anti-fraud and identification verification methods, but there is no timeline for how long it will delay new claim payments, Oleksiak said.
“We will do it as quickly and effectively as possible,” he added. “We know the PUA program is a lifeline for many families, and we want these Pennsylvanians to be able to access support as quickly as possible during this time of hardship.”
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Individuals who applied for PUA benefits for the first time on Thursday and Friday are affected by the delay, but officials have not ruled out double checking claims filed earlier in the week.
Unemployment officials suspect that criminals targeted the PUA program because it lacks safeguards that are in place for the state’s regular unemployment program.
PUA is the federally funded program created in response to the COVID-19 pandemic that pays unemployment benefits to individuals who otherwise don’t qualify for state benefits because they are self-employed.
Claimants self-certify that they are unemployed as a result of the ongoing coronavirus, but they do not go through the same checks to prove they are qualified as claimants in the traditional unemployment program, Oleksiak said.
The biggest difference in the federal and the state-run unemployment programs involves the back-dating of claims, which was done to speed up delivery of benefits, said Susan Dickinson, director of the Office of Unemployment Benefits Policy.
The federal government ordered states to backdate everyone to the last day they worked without first verifying the information, which increased the potential for fraud, Dickinson said.
Pennsylvania is among other states where scammers began filing PUA claims under stolen identities using personal information taken through previous data breaches that occurred outside of state government. The scam started shortly after the PUA program opened.
Pennsylvania and other states implemented security measures to help identify and prevent payout for fraudulent claims including shutting down the automatic backdating in the PUA system.
The security measures reduced the overall number of PUA claims filed, until last week, Oleksiak said.
Federal and state authorities last month charged 33 people, including eight inmates in Pennsylvania prisons and Allegheny County jail with COVID-19 benefit fraud.
Pennsylvania officials recently found the names of an additional 10,000 state prison inmates on Pennsylvania’s unemployment rolls, though it’s unclear whether those people were aware that jobless claims had been filed on their behalf. The fraud was uncovered by U.S. postal inspectors, who noticed a large volume of mail arriving at homes that are abandoned or being sold.
California authorities announced they have arrested 44 people in Beverly Hills so far this month who were allegedly attempting to intercept fraudulently obtained debit cards obtained by using stolen identities. Many of those arrested were from out-of-state.
Also Monday, Oleksiak said Pennsylvania has already paid $1.5 billion of the $2.8 billion it received in federal Lost Wage Assistance program. The federal government is expected soon to announced an end-date for claims to be filed.
The program funded with disaster relief money through the Federal Emergency Management Agency provided $300 a week additional in unemployment compensation to eligible beneficiaries.
The temporary program closed on Sept. 5, but beneficiaries may still be eligible for a lump sum payment of up to six weeks or $1,800.
More Information: Unemployment in Pennsylvania: Not all eligible will get $300 federal benefit
Were you scammed?
Pennsylvanians who believe their identity was stolen and used to fraudulently apply for unemployment benefits can report the theft. Pennsylvanians who have received unemployment benefits they did not apply for should not use the funds and instead follow the directions on returning them.
This article originally appeared on Bucks County Courier Times: Unemployment in Pennsylvania: Gig workers, independent contractors could see delayed benefit payments