Fewer people are applying for benefits in Ohio as continued claims dropped again this week.
But, the onslaught of claims due to the pandemic dried up the state’s unemployment trust fund. And the state asked for permission to borrow up to $3.1 billion to pay claims.
“We’re obligated to continue making payments regardless of the balance of the trust fund,” says Bruce Madson, Assistant Director for Unemployment at ODJFS, who said the balance began at $1.3B. “The situation is not unprecedented; We borrowed under the last recession and repaid the debt by 2016.”
Madson says that request will go down in the future because of the reduction in claims.
“Because the claim load has gradually reduced we will request less than $3.1 billion going forward because we have not needed the amount of authority to ask for,” says Madson on the June 26 ODJFS press briefing call.
Madson says he expects future authority requests to drop to around $2B. He says whatever is borrowed will have to be paid back to the federal government with interest.
Those payment are waived through the end of the year, but eventually the interest cost of the loan will be shared by ohio’s employers.
“It allows us to not deal with the immediate general revenue hit because the interest on the borrowed funds must be paid by the state,” says Madson.
“As of this week the state paid out $4.4B in regular unemployment payments, and $2.8B in federal Pandemic Unemployment Assistance benefits.
344K fewer Ohioans continued filing for unemployment benefits this week than last week.
ODJFS says about 6% of claims are still pending but only around 10K are from March or April.
“Those are pending including the claims that came in yesterday,” says Madson. “So we are disposing of our claims as they come in. We were very behind initially because of the onslaught that we faced, but we are reaching a point now where we are disposing of them within the timeframes established by the DOL for timely processing of payments.”
ODJFS says that many of those remaining are once with complex claims that must be manually processed. The Department of Labor mandates resolution of claims within 21 days of initial filing. Additionally they are working to resolve the issues preventing some filers from completing the PUA application.
“It’s a manual process for those, it’s easier for those now seeking to apply that have that challenge, then those who previously applied,” says ODJFS Director Kimberly Hall. “It is kind of about now going back and making those adjustments. But, we do have a focus around penalty weeks, overpayments, and those who are getting that messaging that they were eligible for regular UI even though they were denied.”
The state also says it will work with Ohioans who have been ordered to repay unemployment overpayments.
Nearly 25K Ohioans are estimated to have non-fraud related overpayments since March 15th according to ODJFS records.
Federal guidelines require ODJFS to investigate and recoup any overpayments to unemployment, regardless of error.
Hall says they have options for Ohioans who need to repay benefits.
“We encourage individuals to certainly file an appeal, that kind of stretches out the time for then what overpayment would come do,” says Hall. “We have mechanisms for payment plans that can be setup et cetera.”