What Is the Lost Wages Assistance (LWA) Program?

The Lost Wages Assistance (LWA) program is a federal-state unemployment benefit that provided $300 to $400 in weekly compensation to eligible claimants. The federal government contributed $300 per claimant per week from the Disaster Relief Fund (DRF), and states were asked to pay the remaining $100, which could be in the form of additional funds or as part of the claimant’s regular weekly unemployment compensation. Due to budget constraints, most states elected to count regular compensation as their contribution.

The program, part of the federal government’s response to the COVID-19 pandemic, was administered by the Federal Emergency Management Agency (FEMA) and covered states, territories, and the District of Columbia, provided that they applied and were accepted by Sept. 10, 2020. The LWA program was meant to address unemployment for the period from Aug. 1, 2020, to Dec. 27, 2020. Unfortunately, funds ran out sooner.

Key Takeaways

  • The Lost Wages Assistance (LWA) program was to provide $300 to $400 in supplemental unemployment insurance benefits from Aug. 1, 2020, through Dec. 27, 2020. However, as expected, the program ended early (on Sept. 5, 2020) due to depleted funding.
  • The program was established on Aug. 8, 2020, through a presidential memorandum signed by then-President Donald Trump.
  • LWA was designed to utilize $44 billion in Disaster Relief Fund (DRF) money to provide a $300-per-week subsidy to eligible claimants. States were asked to provide an additional $100.
  • States, territories, and the District of Columbia were eligible to participate but had to have applied and been accepted by Sept. 10, 2020.
  • Entities that applied and were accepted by Sept. 10, 2020, received funding for six weeks, according to a Federal Emergency Management Agency (FEMA) spokesperson.

Understanding the Lost Wages Assistance (LWA) Program

The LWA program was open to all states, territories, and the District of Columbia, provided they applied and were approved no later than Sept. 10, 2020. States applied through the Grants.gov portal by following instructions issued by FEMA.

To determine whether their state, territory, or district had been approved, claimants checked FEMA’s Lost Wages Assistance Approved States web page. The exact amount received by an eligible claimant depended on several factors. The federal stipend was $300 per week. The state, territory, or district amount was $100 per week but, depending on the state, territory, or district, could have been an extra $100 or part of the regular amount that the recipient was already slated to receive. Finally, the amount of regular unemployment earnings received by the claimant determined the overall total received.

Eligibility and Notification

Claimants were eligible to receive LWA if they had received (or received as of Aug. 1, 2020) a regular weekly individual benefit amount or Pandemic Unemployment Assistance (PUA) of at least $100. This included eligible independent contractors.

The state, territory, or district was required to determine the potential eligibility of claimants and inform them if they qualified. Eligible claimants, depending on the state, territory, or district, could automatically receive funds or be required to file a claim. In general, claimants only had to file once for the duration of the LWA program.

Self-Certification

Claimants were required to self-certify that they were fully or partially unemployed due to COVID-19. Self-certification was not required for any claimant who already had done so under the PUA program. Self-certification was only required once per claim and could be done at the time that the claim was filed for those filing a new claim. No additional documentation was required.

Payments

Each state, territory, or district decided when payments began for their area. LWA payments were added to the claimant’s regular unemployment benefits either in one payment or separately, depending on the payment system of the state, territory, or district.

Payments were retroactive to Aug. 1, 2020, for claimants who were unemployed at that time. Claimants who became or remained unemployed after Aug. 1, 2020, could receive LWA payments for those dates as well.

Initial funding for LWA payments was for three weeks. Additional weeks of payments were to be made on a week-to-week basis. However, the program ended on Sept. 5, 2020, due to a lack of funding.

Funds Were Depleted by Sept. 5, 2020, but States Got 6 Weeks

Initial funding was for three weeks (Aug. 1, 2020, to Aug. 22, 2020). After that time, funding was to be on a week-to-week basis. However, due to depleted funding, the LWA program ended on Sept. 5, 2020. According to a FEMA spokesperson, any state, territory, or district that applied and was approved for LWA funding by Sept. 10, 2020, would receive six weeks of funding for weeks ending Aug. 1, 2020, through Sept. 5, 2020.

History of the Lost Wages Assistance (LWA) Program

The LWA program was created by a memorandum issued by then-President Donald Trump on Aug. 8, 2020. In the memorandum, the president cited the expiration of existing unemployment relief programs as the impetus for the creation of LWA.

The president directed FEMA to administer LWA using $44 billion in DRF money to provide 75% ($300 per eligible claimant per week) while asking states to provide 25% ($100 per week) for a total of $400 per eligible claimant per week for the period from Aug. 1, 2020, through Dec. 27, 2020. Subsequent guidance said states could substitute $100 in regular unemployment compensation for an additional amount of new compensation.

The memorandum further clarified that the funding period would lapse before Dec. 27, 2020, if any of the following three things occurred:

  • The full $44 billion in DRF money was expended before that date.
  • The DRF balance reached $25 billion.
  • Congress enacted legislation providing new unemployment compensation funding.

Other Programs That Can Help

For those who have been impacted by the coronavirus pandemic, other programs besides LWA have been providing help. The Pandemic Emergency Unemployment Compensation (PEUC) program allows people who have exhausted their unemployment compensation benefits to receive an extension of benefits.

Initially, the PEUC program allowed only 13 weeks of additional unemployment benefits and was due to expire on Dec. 31, 2020. However, the program was extended to March 14, 2021, and an additional 11 weeks was added to the benefit for a total of 24 weeks.

Also, the Federal Pandemic Unemployment Compensation (FPUC) program provides an additional $300 weekly to unemployment benefits. The funds are available for any weeks of unemployment beginning after Dec. 26, 2020, and ending on or before March 14, 2021. It’s important to note that the duration and amount of federal benefits, as well as your eligibility, are determined by the laws within the state where you last worked.