On March 27, 2020, Congress passed the federal stimulus package Coronavirus Aid, Relief, and Economic Security (CARES) Act, which introduced new programs designed to assist businesses that had to close or reduce services and individuals who experienced a loss or decline in income due to COVID-19. One of the programs created by the CARES Act is Pandemic Unemployment Assistance (PUA). PUA was designed to provide a benefit for people who are ineligible for “traditional” Unemployment Insurance (UI), such as independent contractors, those who are self-employed and workers with limited work history. 

Eligibility

Both PUA and UI are administered by the Department of Workforce Development (DWD). While both PUA and UI have general eligibility guidelines, every applicant is different, and it is impossible to make a profession-wide determination of eligibility for either program. 

PUA

To be eligible for PUA, the applicant must be unemployed, partially unemployed, or unable or unavailable to work due to one of the COVID-19 scenarios. The COVID-19 scenarios include “Self-employed/Independent Contractors/1099 filers/Farmers — and affected by COVID-19” and “Otherwise not qualified for regular or extended UI benefits and affected by COVID-19.” The full list of COVID-19 scenarios is available on the DWD website at dwd.wisconsin.gov/dwd/publications/ui/pua-18774-p.pdf. 

DWD has encouraged people who think they might be eligible to apply and let DWD evaluate the application.

UI

To be eligible for UI in Wisconsin, a person must be unemployed through no fault of their own, meet a minimum earnings threshold, be available and able to work, and actively seeking employment. Generally getting fired for misconduct or substantial fault or quitting a job would make someone ineligible for UI. The minimum earnings threshold is used to determine if a person earned enough earnings during the person’s base period to qualify for the minimum UI benefit. If a person does not have enough earnings to qualify for the minimum weekly benefit rate, the person does not qualify for UI. The base period is the first four of the last five completed calendar quarters before the person files for UI. DWD offers a helpful chart to determine which quarters an applicant should use to determine if the person earned enough to qualify for the minimum weekly benefit rate at dwd.wisconsin.gov/dwd/publications/ui/ucb_15533_p.pdf.  

Due to the COVID-19 pandemic, the requirement to actively seek work has been suspended per Gov. Evers’ Emergency Order 7: Order to the Department of Workforce Development Regarding Unemployment Insurance (EO #7). Normally, to maintain eligibility, a recipient of UI must conduct four work search activities per week to receive the UI benefit. According to EO #7, “a public health emergency constitutes four work search actions for each claimant who files a claim for each week during which the public health emergency is declared.” Even though the work search requirements are temporarily suspended, some individuals who apply for UI may still need to register with the Job Center of Wisconsin. Upon receipt of an application for UI, DWD will notify the applicant whether the applicant needs to register with the Job Center of Wisconsin to be eligible for UI. Failing to register with the Job Center of Wisconsin, even if not required to do four work search activities during the COVID-19 pandemic, may lead to a delay in obtaining benefits. 

Application process

For both PUA and UI, the application begins online with DWD. PUA applicants will also need to submit proof of income as part of the process. 

PUA

Applying for PUA is a five-step process. 

1. Apply online on the DWD website at my.unemployment.wisconsin.gov/Claimant/Logon/TermsAndConditions.

Individuals who applied for UI but did not qualify because of a lack of covered employment, such as independent contractors, will have to apply for PUA to determine eligibility. Applications for UI are not evaluated for PUA eligibility. 

• Applicants should have the following documentation available to begin the application process:
• Social Security Number.
• Wisconsin Driver’s License (if the applicant has one).
• A list of all employers in the past 18 months, their complete addresses (including zip codes), telephone numbers and the beginning and end dates of the work performed.
• Proof of wages/self-employment from the most recent tax year.

2. Submit proof of income.

Within 21 days of submitting the online PUA application, the applicant must submit proof of income to DWD.

• Previous year’s (2019) complete Federal Tax Return including as applicable:
  • Schedule C-Profit or Loss from Business
  • Schedule F-Profit or Loss from Farming
  • Schedule K-1 Partner’s Share of Income
• Previous year’s (2019) W-2
• Final pay stub in 2019

If an applicant does not have 2019 proof of income information, the applicant can provide 2018 federal tax returns, but using 2018 information means the applicant will only be allowed the minimum PUA benefit if found eligible. If the applicant becomes able to provide proof of 2019 income, the applicant’s claim may be reevaluated, possibly resulting in an adjustment to the benefit amount. Proof of income may be submitted by fax or mail.

3. Application is processed.

DWD is processing many applications for PUA and UI and is cautioning applicants to be patient as they work through the increased volume of applications. To allow DWD to process applications as quickly as possible, they are recommending that applicants not call to check on the progress of an application. DWD will contact an applicant by phone or by mail if more information is needed or if there is a problem with the application.

4. Eligibility is determined.

Applicants will receive an eligibility decision from DWD. Eligible applicants will receive further instructions on how to file weekly claims.

5. File a weekly claim.

Eligibility is determined on a weekly basis. Eligible applicants must file a weekly claim to receive the benefit. An applicant cannot start filing weekly claims until the applicant has been found eligible for PUA. 

An applicant may be eligible for a benefit for some weeks and not others. If an applicant earns $500 or more of income in a week, that applicant will not be eligible for a benefit for that week. According to DWD, real estate agents should report commission in the week it was earned.

Those who qualify for PUA and work less than 32 hours per week and make less than $500 per week may be able to make claims retroactively to February 8 or when the applicant was impacted by COVID-19, whichever is later. Doing some work may not make an individual ineligible for PUA, but the agent may not exceed the 32 hours/$500 per week threshold.

UI

A person who has worked for a covered employer in the last 18 months should apply for UI instead of PUA. A covered employer is an employer that pays UI taxes. The application process for UI is similar to PUA except that an applicant does not need to submit proof of income as DWD will be able to verify an applicant’s income through the employment history provided by the applicant. The online application for UI is available at dwd.wisconsin.gov/uiben/apply.

DWD recommends that UI applicants have the following information available when applying:

• A username and password for filing online
• A valid email or mobile number
• Social Security Number
• Wisconsin driver’s license or identification number
• Work history for the last 18 months
• Current address

Like PUA applicants, a UI applicant must also file a weekly claim to maintain eligibility. 

Benefits

Both PUA and UI benefits are taxable. DWD recommends eligible individuals have state and federal taxes withheld from weekly benefits so they do not have to pay the taxes later. Applicants can opt to have taxes withheld from benefits during the application process. As with any tax issue, applicants are encouraged to speak to their tax adviser if they have questions about federal and state withholding from PUA or UI benefits.

PUA

The benefit amount under PUA is 1% of 2019 net income, subject to the PUA minimum of $163 per week and PUA maximum of $370 per week. Benefits are payable for up to 39 weeks, retroactive to the week ending February 8, 2020, or the first week an individual was out of work due to COVID-19, whichever is later. The last payable week is the week ending December 26, 2020. 

UI 

The weekly benefit for UI is 4% of the total high quarter wages from covered employment in the applicant’s base period. The minimum weekly benefit is $54, which would require high quarter earnings of $1,350. The maximum weekly benefit rate is $370, which would require high quarter earnings of $9,250. 

Federal pandemic unemployment compensation

The Federal Pandemic Unemployment Compensation (FPUC) is another CARES Act program, which provides an additional $600 per week for individuals who qualify for either PUA or UI. The weeks run from April 4, 2020, to July 25, 2020. Per DWD, once a person qualifies, or is eligible for UI or PUA, the FPUC will be automatically added to the benefit payments. No additional application is necessary.

Jennifer Lindsley is Director of Training and a staff attorney for the WRA.