When Lump Sum Unemployment Payments During COVID-19 Pandemic Jeopardize Other Benefits

Many Western New Yorkers who have been fired or furloughed from their jobs in response to the COVID-19 pandemic have applied for Unemployment Insurance Benefits (UIB). Because of the historic deluge of applications, many are getting their unemployment benefits in one lump sum, retroactive to the time of application. While this windfall is a welcome relief, many Western New Yorkers may find themselves suddenly ineligible for other benefits they had been receiving, including Temporary (cash) Assistance (TA).

Because TA payments are very low compared to UIB, this “lump-sum penalty” means that people will likely be disqualified from getting them for a very long time, regardless if they run out of money in the meantime. This can set them up for more financial problems later.

The Health and Economic Security Unit at NLS is helping people figure out the best way to mitigate the impact of these penalties or avoid them altogether.

“In some cases, penalties might be unavoidable, but there are many things that we can do in this situation,” says Penny Selmonsky, Deputy Director, Supervising Attorney, Health and Economic Security Unit. “We can help people better understand their options and cut through the red tape of eligibility requirements. In addition to saving their benefits, we can save them time and emotional stress, which is important.”

Selmonsky encourages everyone to apply for all the benefits for which they are eligible, including SNAP, Medicaid, and HEAP. However, she says it’s important they understand the ramifications of accepting those benefits which NLS is uniquely positioned to do.

For more information, those interested can contact Neighborhood Legal Services toll-free at 1-888-869-6576 or nls.org/contact.

Neighborhood Legal Services, Inc. (NLS) is a not-for-profit agency providing free legal services to persons with low-income and persons with disabilities. NLS helps with domestic violence and other family law matters; health insurance; government benefits/SNAP/shelter/benefits counseling; Social Security disability/SSI hearings; and evictions/housing conditions/housing discrimination matters.

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