Elizabeth Cogar didn’t apply for Virginia unemployment benefits after her freelance writing job ended early last year because she didn’t think she was eligible.
Cogar, 62, changed her mind last April after Congress offered a new kind of emergency benefit to self-employed Americans who had lost their jobs during the COVID-19 pandemic.
But the benefits she received initially — about $87 a week from the state, plus $600 a week from the federal government through July — weren’t based on her eligibility as a “gig worker” under the new Pandemic Unemployment Assistance program. They were based on traditional state unemployment rules and Cogar’s brief employment at a Northern Neck newspaper in 2019, a job she left because of the long commute between Kilmarnock and her home in Richmond.
“I was happy to get anything,” she said.
A year later, in April, the Virginia Employment Commission ruled Cogar wasn’t eligible for state unemployment benefits and demanded that she repay $11,775 in benefits that she had received and spent to survive the pandemic. The state never connected her to the new federal program for aid she may have deserved, although it was supposed to have alerted her by “robo call or text,” according to the VEC.
“This was an error on their part,” she said. “I don’t think as a citizen I should have to pay for their error.”
Her predicament is not unusual for an unemployment system overwhelmed by a record number of jobless claims during the pandemic — more than 1.6 million, or more than 10 times the number normally received in a year — and required to administer new federal emergency benefits for people, such as Cogar, who never would have qualified before.
“It’s somewhat common,” said Megan Healy, chief workforce adviser to Gov. Ralph Northam and, effective July 1, Virginia’s first secretary of labor.
But that doesn’t make it right, said Del. Sally Hudson, D-Charlottesville. She sponsored legislation adopted this year to let unemployed Virginians petition to waive the repayment of benefits they received through no fault of their own during the crisis. The state budget includes almost $19 million to compensate for forgiving the debts.
“There is no value in going back and extracting debts from workers who applied in good faith, did nothing wrong, and because of the chaos and ill-preparedness of the system that serves them, got caught in this trap,” Hudson said Thursday.
Those debts would have been lower, she said, if the VEC had moved faster to adjudicate disputed unemployment claims — as it now must under a settlement of a federal class action lawsuit against the agency for long delays in determining eligibility for jobless benefits.
Hudson, who serves on a legislative commission on unemployment compensation, said many of her constituents have been caught in a similar predicament because they work in the evolving “gig” economy.
“It’s sort of an indictment of the hole in our patchwork unemployment system,” she said.
Instead of working for a “covered employer” who pays into the state unemployment system to provide benefits to laid-off employees, many workers are self-employed or move from job to job.
“More and more workers don’t fit into that box,” Hudson said.
To fill that gap, the Pandemic Unemployment Assistance program was created as part of the CARES Act, which Congress approved and President Donald Trump signed almost 15 months ago. It has been extended twice under the Consolidated Appropriations Act, a stopgap package enacted in late December, and the American Rescue Plan Act, which President Joe Biden signed in March with enhanced unemployment benefits extending to Sept. 6, Labor Day.
To get help, self-employed workers have had to go through the unemployment insurance system administered by the VEC to be denied traditional benefits before they can apply under the new federal program for benefits for which they may be eligible.
But once the VEC determines they were not eligible for traditional unemployment benefits, they get the bill to repay the money. In Cogar’s case, the agency determined she wasn’t eligible for traditional benefits because she had left the newspaper job voluntarily because of the commute.
“Why did they not determine my eligibility before sending the benefits out?” Cogar asked. “If they were trying to get the money out, I can appreciate that, but I don’t think you can come back a year later and say, ‘We goofed!’”
Ideally, Healy said, people who were self-employed would be evaluated for eligibility under the federal PUA program before they are considered for traditional unemployment benefits, which are tied to employers that pay into the state unemployment trust fund through payroll taxes.
Benefits under PUA don’t come from the state trust fund, but instead are paid with federal money that Virginia received through the trio of federal relief packages.
Healy and the VEC say Cogar’s best option is to qualify for PUA benefits before they expire on Sept. 6 so she could use them to pay her debt. The agency said it would help her apply for the federal benefits.
If she qualifies, those federal benefits “will pay off the overpayment and she won’t be liable for that,” VEC spokeswoman Joyce Fogg said.
Cogar’s other option would be to apply for a hardship waiver to show she was overpaid through no fault of her own and cannot afford to repay the money.
She said she spent the money to survive the pandemic and she’s still unemployed. She’s looking for a job that would allow her to also tend to her 88-year-old mother in a long-term care facility, and she’s enrolling in a class to learn how to write proposals for grants.
“I would be happy to be full-time employed,” she said.
However, the new overpayment waiver program doesn’t take effect until July 1. The process of obtaining a waiver is still unclear to the agency that will administer the new law.
“I don’t know what the process is yet,” said Fogg at the VEC.