Published on: September 29, 2020 Last modified: October 13, 2020

How to Qualify for the Lost Wages Assistance Program

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    The Lost Wages Assistance Program (LWA) is the Trump administration’s latest push to help workers during the COVID-19 pandemic. The Coronavirus Aid, Relief, and Economic Security Act, commonly known as the CARES Act, was the first stimulus to provide emergency compensation to those who needed it most. By providing further pandemic unemployment assistance (PUA), the federal government is working to ensure each eligible claimant has access to adequate unemployment benefits. 

    While an exact amount is still being tabulated, upward of 40 million Americans lost their jobs because of the economic downturn caused by the coronavirus. The ripple effects from these job losses will surely be felt by those individuals as well as our society for many years to come.

    Getting unemployment benefits present challenges in normal times. During a global pandemic, attempting to keep food on your family’s table can seem overwhelming. One step to getting back on your feet is finding out how to qualify for the LWA.

    Lost Wages Assistance Program

    The LWA was created to lighten the burden on those individuals who may have lost jobs or had a reduction in hours directly related to the pandemic. President Trump authorized the Federal Emergency Management Agency (FEMA) to tap into the disaster relief fund to provide additional emergency compensation for out-of-work individuals.

    woman struggling financially who qualifies for the lost wages assistance program

    The program caps the amount of money individuals can receive at $400 per week above and beyond any other unemployment compensation they may receive. The federal government provides $300 to states through FEMA, and the participating states add the additional $100. 

    Not all states are taking part in this program, however, and not all states are adding the additional $100. That means your unemployment compensation benefits might cap at $300, depending where you live.

    Steps to Qualify for LWA

    Countless individuals across America are currently struggling with finances because of a lost job, decreased income, or reduced business revenue. The LWA represents a safety net, and here are the steps to qualify:

    1. Determine Eligibility

    Not everyone who has lost a job or work hours can qualify under the LWA. To be eligible, you must certify that you are either unemployed or underemployed because of COVID-19. You must also be eligible for a weekly benefit amount of at least $100 in pandemic unemployment assistance. If you would otherwise meet the eligibility but would receive less than $100 per week, you are not eligible for the additional $300 per week under the LWA.

    2. Live in a Participating State

    Not every state is participating in this program. South Dakota has decided not to take part at all, for example, and Delaware, Kansas, Nevada, and New Jersey are currently awaiting approval of the application to join the LWA. D.C., Nebraska, and Puerto Rico have not decided if they will participate because of concerns about the cost and implementation of the program. 

    There are 44 states currently approved for the additional benefits and five states where LWA benefits are currently being distributed. While the vast majority of states are participating, you may not be able to receive the additional support payments if you do not live in one of the states that is. That should not deter you from applying for your state’s unemployment insurance, however.

    3. Apply for Lost Wages Assistance Program 

    If you have previously applied and been approved for unemployment benefits from your state, there is nothing you need to do to receive the additional $300 per week. Your state’s unemployment program will automatically enroll you and start issuing payments once it receives funds from FEMA.

    receiving check from the lost wages assistance program

    If you are still applying for or have yet to apply for your state’s unemployment benefits, you must make it clear during your application process that you lost income because of COVID-19. This will trigger the additional funds for deposit into your account.

    You can also begin receiving the additional $300 per week if you lost your job for reasons unrelated to the coronavirus, but now cannot find employment because of it. You must first contact your state’s unemployment assistance program and certify that you cannot get a new job because of the pandemic.

    Additional LWA Program Details

    A few extra LWA Program facts:

    • FEMA provides the funds to each state every week. The additional $300 payment will then hit your account as soon as your state processes the federal pandemic unemployment compensation payments. 
    • The program is set to expire on December 27, 2020, but may end earlier if FEMA exhausts all funds prior to that date. 
    • The program may also end early if FEMA’s disaster relief fund drops below $25 billion. This money is normally set aside for natural disasters such as hurricanes, so the government wants to ensure there is adequate compensation available should such a tragedy occur. 
    • The LWA Program could be cancelled if Congress passes legislation addressing unemployment benefits. It already took this action earlier this year with the CARES Act, and there has been intense discussion about a similar package.

    If any of these scenarios happen, you may not receive an additional $300 per week through the end of the year. It is best to plan accordingly.

    Tax Advisors Can Help You

    Many out-of-work Americans are concerned with their unemployment ending. While your immediate focus is on ensuring you have funds to help your family put food on the table and meet essential needs, you need to account for future needs, too. The federal government intends to provide the LWA immediately for temporary relief, but could tax the extra funds you receive — resulting in an increased tax burden for you. Contact Silver Tax Group today to discuss your Lost Wages Assistance Program questions, or to speak with an expert about other tax-related questions and concerns.

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