What Is the Lost Wages Assistance (LWA) Program?
The Lost Wages Assistance (LWA) program is a federal-state unemployment benefit that provides $300 to $400 in weekly compensation to eligible claimants. The Federal government provides $300 per claimant per week from the Disaster Relief Fund (DRF) and states are asked to provide the remaining $100, which can be in the form of additional funds or as part of the claimant’s regular weekly unemployment compensation. Due to budget constraints, most states are electing to count regular compensation as their contribution.
The program is administered by the Federal Emergency Management Agency (FEMA) and applies to states, territories, or the District of Columbia, provided that entity applies by Sep. 10, 2020, and is accepted. The LWA program covers unemployment for the period Aug. 1, 2020, to Dec. 27, 2020, although funds ran out sooner.
- The LWA program provides $300 to 400 in supplemental unemployment insurance benefits from Aug. 1, 2020 through Dec. 27, 2020 although, as expected, the program ended Sept. 5, due to depleted funding.
- The program was established Aug. 8, 2020 through a Presidential Memorandum signed by Donald J. Trump.
- LWA is designed to utilize $44 billion in Disaster Relief Funds (DRF) to provide a $300 per week subsidy to eligible claimants. States are asked to provide an additional $100.
- States, territories, and the District of Columbia are eligible to participate but must apply by Sep. 10, 2020.
- Entities that applied by Sep. 10, 2020 will receive funding for six weeks, according to a FEMA spokesperson.
Understanding the Lost Wages Assistance (LWA) Program
The LWA program is open to all states, territories, and the District of Columbia provided they apply and are approved no later than Sep. 10, 2020. States must apply through the Grants.gov portal by following instructions issued by FEMA.
To determine whether their state has been approved, claimants can check FEMA’s Lost Wages Assistance Approved States webpage. The exact amount an eligible claimant will receive depends on several factors. The federal stipend is $300 per week. The state amount is $100 but, depending on the state, could be an extra $100 or part of the regular amount the recipient was already slated to receive. Finally, the amount of regular unemployment earnings the claimant receives will determine the overall total received.
Eligibility and Notification
Claimants are eligible to receive LWA if they receive (or received as of Aug. 1, 2020) a regular weekly individual benefit amount or Pandemic Unemployment Assistance (PUA) of at least $100. This includes eligible independent contractors.
The state or territory is required to determine the potential eligibility of claimants and so inform them if they are eligible. Eligible claimants, depending on the state or territory, may automatically receive funds or be required to file a claim. In general, claimants would only have to file once for the entire duration of the LWA program.
Claimants are required to self-certify that they are fully or partially unemployed due to COVID-19. Self-certification is not required for any claimant who already did so under the PUA program. Self-certification is only required once per claim and can be done at the time the claim is filed for those filing a new claim. No additional documentation is required.
Each state or territory will decide when payments begin for that state or territory. LWA payments will be added to the claimant's regular unemployment benefits either in one payment or separately depending on the state or territory's payment system.
Payments are retroactive to Aug. 1, 2020, for claimants who were unemployed at that time. Claimants who became or remained unemployed after Aug. 1, 2020, can 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, due to lack of funding the program ended Sept. 5, 2020.
Funds Were Depleted by Sept. 5 But States Will Get 6 Weeks
Initial funding was for three weeks (Aug. 1–Aug. 22). After that time, funding was to be on a week-to-week basis. Due to depleted funding, however, the Lost Wages program ended Sept. 5, 2020. According to a FEMA spokesperson any state or territory that applied for Lost Wages funding by the Sept. 10, 2020 deadline, would receive six weeks funding for weeks ending Aug. 1 through Sept. 5.
History of the Lost Wages Assistance (LWA) Program
The LWA was created by a memorandum issued by President Donald J. Trump 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 the Federal Emergency Management Agency (FEMA) to administer LWA using $44 billion in funds from the Disaster Relief Fund (DRF) to provide 75% ($300 per eligible claimant per week) while asking states to provide 25% ($100) to provide a total of $400 per eligible claimant per week for the period 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 may lapse before Dec. 27 if any of the following occur:
- The full $44 billion in DRF funds is expended before that date; or
- The DRF balance reaches $25 billion; or
- Congress enacts legislation providing new unemployment compensation funding.