Here’s Why It’s Taking Pennsylvania So Long to Pay Out Unemployment Benefits

Labor & Industry Secretary Jerry Oleksiak said $3.5 billion in unemployment benefits has been paid out so far, but acknowledged that means little to unemployed workers who haven’t gotten anything yet.

More than a month after Pennsylvania’s unemployment compensation system buckled under the strain of COVID-19, Colleen Angeli has yet to receive a dime — and May bills are coming due.

Angeli, a 60-year-old receptionist from Hershey, is among the record 1.6 million workers who’ve applied for unemployment since mid-March, when the administration of Gov. Tom Wolf began closing nonessential businesses in an effort to slow the spread of the new coronavirus.

The business closures unleashed an unprecedented flood of new claims, and the Department of Labor & Industry was unable to keep up. Officials say the claims backlog has been whittled down, but have not revealed how many people have actually received unemployment assistance.

Meanwhile, Angeli has yet to receive an identification number from the unemployment office, let alone a determination letter that would tell her she’s been approved or how much she can expect to receive. The most infuriating part is she can’t get anyone on the phone to give her an update. Email isn’t any better — the agency has a 25-day backlog.

“I’m one of those paycheck to paycheck people,” said Angeli, and without unemployment, she’ll have to pick and choose which bills to pay. “If I make my rent payment, I can’t pay my other bills. If I pay my other bills, I can’t pay my rent.”

Labor & Industry Secretary Jerry Oleksiak said $3.5 billion in unemployment benefits has been paid out so far, but acknowledged that means little to unemployed workers who haven’t gotten anything yet.

“We know that there are people who are frustrated, feeling desperate,” he said. “We want to help them. We are doing all we can as quickly as we can.”

Like others around the country, the state’s unemployment office was wholly unprepared for the pandemic, operating with a staff thinned by budget cuts and capable of handling only a relatively small number of claims.

Complicating matters is that Pennsylvania relies on a 40-year-old computer system to process unemployment claims — a system so creaky it can’t easily handle applicants reporting six-figure salaries. A replacement computer system, under development since 2006, has been plagued by delays and cost overruns.

The state’s chief fiscal watchdog, Auditor General Eugene DePasquale, warned in 2017 that the unemployment office’s mainframe computer was “being held together with bubble gum and rubber bands.” He said Tuesday that while the timing of the pandemic was unforeseeable, it’s been known for years that an economic recession and resulting spike in unemployment claims would overwhelm the system.

“I think they did the best they could with the funding they had,” DePasquale said. “They needed more help from funding through the budget process to really fix this system. I do believe there are a lot of very dedicated employees there that are dealing with the angry phone calls, doing the best they can. It’s not their fault.”

The new claims system is finally projected to launch in October.

“We wish we had it before the pandemic started, but timing’s everything,” said Susan Dickinson, director of the state Office of Unemployment Compensation Benefits Policy.

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On the staffing side, meanwhile, Labor & Industry has brought in hundreds of workers to help answer calls and emails, and hundreds more are being trained, Oleksiak said.

Separately, the agency is preparing to administer a new federal benefits program, called Pandemic Unemployment Assistance, for self-employed and gig-economy workers and others barred from receiving traditional unemployment. The state has processed more than 100,000 of those claims since the platform went live April 18, but says it won’t be ready to start making payments until early May.

Carolyn Butera, an independent contractor who processes real estate transactions, applied for the new unemployment program and is waiting for the money to start flowing. She said people like her were deprived of the ability to earn a living under Wolf’s business shutdown.

Those same workers have now gone more than a month without any income, she said.

“You left everyone without a job,” Butera said. “How did you not know this many people were going to be filing?”