The second stimulus package is tightening the rules for millions of gig workers, independent contractors and self-employed workers receiving unemployment aid.
On Dec. 27, the $900 billion stimulus package extended Pandemic Unemployment Assistance, a critical benefits program for folks who don’t typically qualify for regular unemployment aid. The deal lengthened PUA benefits for at least 11 weeks, but it also created new filing rules that affect current recipients and new applicants alike.
Chief among the new rules: You will need to submit income documentation to your state’s unemployment agency if you are a gig worker or self-employed worker — or risk losing future benefits and having to return any benefits collected after Dec. 27.
“I think they are a real pain,” said Michele Evermore, an unemployment policy analyst for the National Employment Law Project, regarding the new PUA filing rules. “Not just for recipients, but for state agencies to collect. Every burden we add to state agencies slows benefit processing for everyone.”
The new requirements are intended to combat fraud. According to the Department of Labor, more than 7.4 million people are relying on PUA and are subject to the changes.
New Pandemic Unemployment Assistance Rules and Deadlines
The new deadlines established by the second stimulus package are different for current PUA recipients and new applicants.
As a current PUA recipient, you have until March 27 to submit income-related documents to prove your PUA eligibility. If you apply for PUA before Jan. 31, you also have until March 27.
If you apply for PUA Jan. 31 or later, you will have 21 days from the date of your application to submit income-related documents.
The Department of Labor requires each state to notify you of your state-specific rules. Your state may have different deadlines. In that case, refer to your state’s instructions. The DOL is also leaving it to each state to determine exactly what documents are required to prove your eligibility.
Here are some examples of documents your state may ask you to file:
- Tax forms such as 1099s and W-2s.
- Ledgers, recent pay stubs and earnings statements from gig apps.
- Recent bank statements showing direct deposits.
If you’re self-employed, you may be required to submit:
- Federal or state income tax documents.
- A business license.
- A 1040 tax form along with a Schedule C, F, SE or K.
- Additional records that prove you’re self employed, such as utility bills, rental agreements or checks.
If you’re qualifying for PUA because you were about to start a job but the offer was rescinded due to COVID-19 related reasons, you may be asked to submit an offer letter, details about the employer and other information related to the job to verify your claim.
Another new rule is that you will have to self-certify that you meet one or more of the following PUA eligibility requirements on a weekly basis:
- You have been diagnosed with COVID-19 or have symptoms and are seeking diagnosis.
- A member of your household has COVID-19.
- You are taking care of someone with COVID-19.
- You are caring for a child or other household member who can’t attend school or work because it is closed due to the pandemic.
- You are quarantined by order of a doctor or health official.
- You were scheduled to start employment and don’t have a job or can’t reach your workplace as a result of the pandemic.
- You have become the breadwinner for a household because the head of household died due to COVID-19.
- You had to quit your job as a direct result of COVID-19.
- Your workplace is closed as a direct result of COVID-19.
Self-certification means that you swear the reason(s) you are on PUA is or are true at the risk of perjury. Previously, PUA applicants had to self-certify only once at the time of their initial application.
Evermore says that since current PUA recipients weren’t asked to submit all this information when they were first approved, they might no longer have access to the requested documents.
“People who were told they don’t need documentation may have lost it, and this will create panic resulting in more stress on people who have already had an unimaginably bad year,” she said.
The good news, Evermore says, is that states have leniency to waive some of these requirements if you can demonstrate “good cause” for not being able to submit the requested documents. What’s considered “good cause” is also determined on a state-by-state basis.
“People who got approved for benefits in the past won’t necessarily get cut off from benefits simply because they are unable to produce the requested documentation,” Evermore said. “Just follow all of the agency’s instructions carefully.”