Unemployment: What to Do if Your Direct Deposit Is Late | Family Finance
Your unemployment benefits haven’t landed in your bank account, even though the payment should arrive via direct deposit.
While many people receive their unemployment check in the mail, direct deposit is generally considered a faster, easy way to receive the money. But lately – and, really, since the COVID-19 pandemic began – some people have found that unemployment direct deposits have been delayed. The slowdowns have been attributed to everything from the volume of people needing unemployment benefits to technological issues and outdated payment systems.
In other words, if you haven’t received your unemployment direct deposit, you are hardly alone. States have blamed the volume of requests for unemployment benefits as well as limited staff. The fact that many government employees are working from home during the pandemic has not helped either.
“Many states are reporting backlogs in processing unemployment claims,” says Stacy Mastrolia, an associate professor of accounting at Bucknell University in Lewisburg, Pennsylvania. “There are a number of reasons for these delays – only some of which are in the control of the individual filing the unemployment claim.”
Reasons Your Unemployment Direct Deposit Is Late
As noted, some of the reasons are within your control, and some aren’t. Here are some possible explanations for why you may not have your unemployment direct deposit:
You filled out the questionnaire incorrectly. When you sign up for unemployment benefits, you have to answer questions, and most people these days do that online. You may have answered a question incorrectly.
“One of the recently added questions asked on a new unemployment claim is whether the coronavirus is the primary reason for unemployment,” Mastrolia says.
While you may not be 100% sure your job loss was directly caused by the coronavirus, you should answer “yes,” according to Mastrolia. Answering “no” may mean that you don’t receive the enhanced unemployment benefits passed by former President Donald Trump and Congress in December.
That’s one important reason to call your local unemployment office and talk to someone who may be able to help you, so that the questionnaire is filled out correctly and you can get your unemployment benefits.
You didn’t provide all the required documentation. For example, you may have left off your driver’s license number or Social Security number. Not filling out online forms properly happens more than you might think. “Missing documents or information are common reasons that unemployment claims are delayed,” Mastrolia says.
Again, you may discover this if you make a phone call to your local unemployment office.
You are caught in a bottleneck. Mastrolia says due to the volume of unemployment claims, there are more issues with claims, which means more phone calls than usual are coming into government agencies.
“Not surprisingly, this has created an extensive backlog of applications that require human intervention to be resolved while, at the same time, it may take longer to manually verify the information on an application,” she says.
This creates a human bottleneck, she says, at an agency that is likely understaffed with employees working remotely.
Systems are outdated. We live in 2021, but the payment system delivering your unemployment direct deposit may have been put together decades ago. In other words, an older system may have worked the way it was supposed to when unemployment was low, but once the pandemic drove unemployment numbers much higher, things became more complicated – and slower. “Adding to the human bottlenecks, many states have admitted that their unemployment agencies have outdated systems that were not designed to handle the huge volume of new claims being processed,” Mastrolia says.
A technical snafu has occurred. For instance, last September, a coding error caused the Ohio Job Insurance system to send direct deposit payments to banks without the recipients’ names.
Banks then had to figure out who the money was for – or simply rejected the payments – and some Ohioans didn’t receive their direct deposits promptly. You could be in a similar situation.
Your claim could be held up due to suspected fraud. It isn’t that the government suspects you of defrauding anyone, but your unemployment direct deposit may have gone to a con artist.
Nationally, fraudulent unemployment claims have increased. States that in previous years saw dozens of fraudulent unemployed insurance claims have seen tens of thousands of cases in the last few months. Ohio, Pennsylvania, Illinois, Washington and Arizona are just a handful of states that have seen fraudulent claims skyrocket.
You will likely get your money if it turns out you were a victim, at least judging from the comments from Ohio Lieutenant Governor Jon Husted, who recently said in a coronavirus briefing: “If you have a legitimate claim you will get every penny that you are eligible for. That reassurance is important to know.”
What to Do if Your Unemployment Check or Direct Deposit Is Late
First, if you’re getting an unemployment check, you should arrange direct deposit to your bank account instead. While clearly not everyone gets their direct deposits promptly, it’s generally a quicker option than a check’s journey through the postal system.
Next, make a phone call to your state unemployment agency. Tell the customer representative that you’re concerned that your unemployment insurance payment hasn’t shown up. If there is a problem, the faster your state learns about it, the faster they can fix it.
You should probably also call your bank, says Michael Foguth, founder of Foguth Financial Group, a financial planning firm in Brighton, Michigan, who has had several clients experience delays or disruptions in their unemployment direct deposits.
Foguth says that even if your state unemployment agency fixes the issue and assures you that your check is coming, you’ll want to monitor your bank account and make sure no automatic payments have withdrawn money that you don’t have, due to your unemployment direct deposit not arriving.
If that’s the case, don’t be bashful. “Reach out to your financial institution and explain your scenario,” Foguth says.
“During this unprecedented time, most lenders and collectors are more understanding and forgiving,” he says.