1.4 Million Californians May Have To Pay Back Unemployment Benefits

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The state of California is asking 1.4 million unemployment recipients to prove their eligibility months after receiving benefits.

The move is part of the Employment Development Department's (EDD) attempt to recover from widespread unemployment fraud.

Many Californians are at risk of having to pay back over $30,000 because they don't have the necessary documents.

CalMatters used examples like a tattoo artist who is unable to prove he was working because he ran a cash operation and a musician who lost all of her unemployment documents when her home burned down in a wildfire to show residents who are being affected by the EDD's clawback program.

In late 2021, the EDD launched the clawback program, requiring around 1.4 million people who received federal pandemic unemployment assistance to retroactively prove they were working or seeking work.

The program was aimed at helping people who don't usually qualify for unemployment benefits because they do freelance work or own small businesses.

The state reports that a majority have been deemed eligible and won't have to repay, but there are many who are unable to provide documentation which means they could have to repay benefits that could add up to tens of thousands of dollars, reports CalMatters.

Experts have warned against the EDD's clawback program saying it would only hurt poor Californians who were already disproportionately affected by the pandemic.

CalMatters also reports that former federal prosecutor McGregor Scott who was hired by the state to lead a separate investigation into unemployment fraud expressed skepticism that the clawback program would actually recoup billions lost to fraudulent claims.

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