From Stimulus Checks to Extra Unemployment Cash, Politics and Blunders Delay Lifeline Payments

As Americans wait for Congress to break the political gridlock on a new stimulus bill that they hope includes more checks, issues with local administration systems are also delaying other lifeline payments to those in financial need.

From the political freeze in Congress, to disruptions to the Lost Wage Assistance benefits in New York, to an unemployment claim backlog in California, many Americans are still awaiting more cash support to help them through the pandemic.

CBS 6 recently identified problems with New York's distrubition of federal Lost Wage Assistance benefits after people said their payment history was deleted.

It came on top of issues the Department of Labor (DOL) had already identified and worked through this weekend involving KeyBank, which is the state's chosen bank to deliver unemployment funds to individuals.

The DOL has said it is looking into what has happened to the details of those eligible for the additional $300 a week. Funds, which were meant to be transferred on Friday, didn't arrive until Monday.

The next round of cash is due to be distributed this week but many people are still having issues, and a day hasn't been announced for when the money will drop in peoples' bank accounts.

Issues have also played out in California. The state has said it will not accept new unemployment claims for the next two weeks in order to tackle fraud and the backlog of claims it has received.

A release from the California Employment Development Department said that it currently has a backlog of nearly 600,000 Californians who applied for unemployment insurance more than 21 days ago but whose claims have not been processed.

It also said it has an estimated 1 million cases where individuals received payments but subsequently modified their claim and thus are awaiting resolution.

People in Ohio have had payments delayed too, after a coding error meant bank transfers to those in need were rejected.

"While we don't want to minimize the problem, because even just one payment delayed is too many, we also don't want to alarm Ohioans," Bret Crow, spokesman for the Ohio Department of Job and Family Services, told Cleveland.com.

"The vast majority were processed as usual because of our proactive outreach efforts to banks or the banks' comfort level with the fidelity of the data."

Amid these other administrative issues, recent findings by the U.S. Government Accountability Office (GAO) showed there was no available IRS and Treasury Department data for 14 million people in the last round of stimulus.

Those that did not file tax returns or receive federal benefits may have missed out on the $1,200 checks, according to the report, which looked at the $2.6 trillion that was passed in emergency coronavirus support.

The report states that the Treasury had followed the advice on extending the deadline for those people to apply for payments, and 5.3 million used an IRS tool to do so.

A further 8.7 million remaining people who didn't use the tool have not yet received a payment and could also fall through the cracks in the next round of stimulus checks if Congress signs off on another batch.

Administrative issues in states should soon be ironed out, but there doesn't yet seem to be an end in sight for those waiting on another round of stimulus checks.

Stimulus bill talks have been on hold for over a month now, and face further delays as lawmakers turn their attention to the debate over a replacement for the late Justice Ruth Bader Ginsburg on the Supreme Court.

Recent data on personal finances have led economists to call the U.S. recovery "K-shaped."

That is one where rich, white, and college-educated Americans have rebounded fairly comprehensively from the downturn, while those with low incomes experience a slower rate of return to normality.

Delays to unemployment checks and problems with administrative systems exacerbate issues with personal finances for those at the poorer end of the spectrum.