Frequently Asked Questions About Receiving Supplemental Payments for Lost Wages

Yes, bank expenses incurred are an allowable expense as part of the administrative costs for the Supplemental Lost Wages Assistance. During closeout of the Lost Wages Assistance award, the state, territory and the District of Columbia should account for these costs when they submit the necessary documentation to reconcile administrative costs.

States, territories and the District of Columbia should identify estimated reasonable costs in their applications. Once approved and awarded, funds can be drawn down in accordance with the grant award letter and other requirements, such as the Cash Management Improvement Act.

Unemployment Insurance (UI) employees are federally funded by the Department of Labor (DOL). The DOL’s funding may not be used to administer supplemental lost wages assistance.

As such, the state, territory and the District of Columbia may utilize the funding provided by FEMA for administrative costs under the supplemental lost wages assistance grant for employees’ regular and overtime hours to deliver supplemental lost wages assistance. Example: 40 hours per week is normally paid with 100% UI funding. The employee is now spending 50% of her time on supplemental lost wages assistance. So long as the state, territory and the District of Columbia does not charge 50% of the employee’s cost to the UI administrative grant for the period of time that the employee is supporting supplemental lost wages assistance, the state/territory can use FEMA funding for administrative costs to pay the employee’s costs for administering supplemental lost wages payments.

States, territories and the District of Columbia must account for the time charged and demonstrate a proportional allocation of staff costs to facilitate the delivery of the program so as to avoid any improper duplication of charging. As a general rule, the state, territory and the District of Columbia may submit charges to administer supplemental lost wages assistance for all employee overtime and any portion of the employee’s regular time costs not also paid for with other federal funds.

No, if a state, territory and the District of Columbia uses Unemployment Insurance (UI) resources that are currently used to support administration of the UI programs (such as the UI IT systems, staff, call-centers, and building costs) to support administration of the supplemental lost wages assistance program, then the state/territory must develop a cost allocation plan. This is necessary to ensure that funding from USDOL-funded UI programs only supports those programs and FEMA funding for the supplemental lost wages assistance program only supports administration of the supplemental lost wages assistance program.

However, the underlying benefit costs and administrative costs for the regular UI program may be used to support the cost share for administrative costs.   

Yes, the Stafford Act authorizes administrative costs of no more than 5% of the total grant; these funds are in addition to those for benefit payments. The administrative costs are subject to the statutory 25% cost share. Upon grant award, FEMA will only provide the state, territory and the District of Columbia with the 75% federal contribution for the administrative costs. Pacific Territories may request a cost share waiver under the Insular Areas Act. (See 48 U.S.C. § 1469a). 

Yes, the state, territory and the District of Columbia has discretion as to whether it issues a combined payment or separate payment for supplemental lost wages assistance, but the state/territory must be able to account for supplemental lost wages assistance separately from the underlying benefit. Whether paid together or separately, the supplemental lost wages payments must be paid at the same time as the underlying benefit (either weekly or bi-weekly).

The supplemental lost wages benefits provided under section 408(e) of the Stafford Act do not count as income for purposes of determining eligibility for income-based federal benefits. The payments are available under section 408 of the Stafford Act “Federal Assistance to Individuals and Households,” 42 U.S.C. § 5174. Pursuant to section 312(d) of the Stafford Act, as implemented at 44 C.F.R. § 206.110(f), such assistance “shall not be considered as income or a resource when determining eligibility for or benefit levels under federally funded income assistance or resource-tested benefit programs.” (42 U.S.C. § 5155).

Per the Presidential Memorandum that authorizes this assistance, the federal share for supplemental lost wages payments is fixed at $300. The state, territory and the District of Columbia may choose to provide all claimants either a $300 or a $400 supplemental payment. These amounts cannot be adjusted. The supplemental payment is not unemployment insurance; it is a supplemental payment on top of the applicable unemployment insurance benefit paid by the state, territory and the District of Columbia.

The funding will be provided to existing and new claimants for unemployment compensation who self-certify that they are unemployed or partially unemployed as a result of COVID-19 from the week of unemployment ending August 1, 2020 through December 27, 2020 or until termination of the program because funding is exhausted.

Once the Period of Assistance terminates, no additional funding will be provided by FEMA in grant awards or amendments for benefit payments. However, during the grant award’s Period of Performance, the state, territory, and the District of Columbia may continue to incur allowable administrative costs under the LWA program (2 C.F.R. § 200.309).  During the Period of Performance, states, territories, and the District of Columbia may continue the issuance of supplemental payments to eligible claimants who submitted timely claims during the Period of Assistance. In other words, during the Period of Performance:

• States, territories, and the District of Columbia may continue to issue LWA payments to claimants for the weeks they were eligible as long as those claimants submitted their claim(s) during the Period of Assistance. States, territories, and the District of Columbia may only issue these payments if they have funding available within the total obligation awarded for benefits by FEMA during the Period of Assistance.
• With regard to appeals, states, territories and the District of Columbia may pay applicants for the 6 weeks of assistance authorized for supplemental lost wages benefits following appeals that are decided in the applicants’ favor during the Period of Performance if funding is available within the total obligation awarded for benefits by FEMA during the Period of Assistance.

FEMA acknowledges that states, territories and the District of Columbia may not be able to administer payments to all eligible applicants who submitted timely claims or adjudicate all timely appeals during the initial Period of Performance. Therefore, states, territories, and the District of Columbia may request an extension of the Period of Performance, if necessary, to fully administer the LWA program and make all eligible payments within the total obligation awarded by FEMA.