Arizona DES director says extra $300 unemployment pay to end soon

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PHOENIX (AP) - Unemployed Arizona residents who have been getting an extra $300 a week under a Trump administration coronavirus relief program are likely to lose that extra benefit in the coming weeks, the head of the state’s social service agency said on Sept. 2.

Department of Economic Security Director Michael Wisehart said Arizonans getting the extra pay on top of the regular $240 per week unemployment benefit for the past month will get that cash this week and possibly next. But the pool of federal cash President Donald Trump is tapping could run out after that.

“Right now the thing we know for sure is we can pay this week,” Wisehart said in a video media briefing. “We have an expectation but no certainty yet that we will be able to pay next week.”

Arizona was the first state that signed on to the program Trump announced on Aug. 8 as a stopgap measure while Congress tries to negotiate additional unemployment pay. Recipients who lost jobs during the pandemic had previously been receiving an extra $600 a week, but that program ended at the end of July.

Wisehart said large states like California, Texas and Florida have now been approved for the program and are expected to quickly exhaust money in the Federal Emergency Management Agency fund Trump is using. Unless Congress acts, the extra pay will end suddenly.

MORE: More than 1 million Americans applied for unemployment benefits

“It has a huge impact on Arizonans receiving benefits right now,” Wisehart said.

About 392,000 Arizonans are currently receiving unemployment benefits, either for regular jobs they lost after the coronavirus hit in March or self-employed people eligible under a special federal program. That’s up from about 17,500 before the pandemic hit in March and Gov. Doug Ducey began ordering businesses to close to contain the spread of the virus.

Wisehart also for the first time Wednesday revealed the scope of the fraud in that new system, saying that his agency is holding onto more than 900,000 unemployment applications that are possibly fraudulent.

He said the state is also reviewing about 30,000 additional reports of possible fraud, many involving identity theft. And he said the losses to taxpayers from claims already paid may be huge.

“I suspect we’re likely in the hundreds of millions in fraudulent payments that went out,” Wisehart said.

Arizona is working through the number of cases that were flagged as potentially fraudulent, and has eliminated about 95,000 claims and paid them in recent weeks. The state has hired more than 1,000 new employees to work unemployment cases or answer phones since the pandemic sent claims skyrocketing.

But it is still being hit with new claims: More than 131,000 people filed for unemployment for the first time last week, even as the state was reopening more businesses.

“Thinking through where we are in the pandemic, the fact that we got another 131,000 claims last week is troubling,” he said. “Obviously there were people that lost their jobs last week that needed to file.

“But obviously a number are likely to be fraud, so we are continuing to be extremely vigilant on that.”

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