HELENA – Higher unemployment benefits in Montana could be contributing to an increase in new unemployment claims, officials said Thursday.
Montana is one of the first states to offer $400 in weekly unemployment payments through the Lost Wages Assistance Program created by President Donald Trump, after Congress did not renew the weekly $600 benefit available through the CARES Act. The benefit expired July 31.
“When folks have more money in their pocket to spend at the grocery store or shop at the main street businesses, we are protecting the progress we already made so far towards economic recovery,” Gov. Steve Bullock said during a news conference.
Bullock said $300 would come from the Federal Emergency Management Agency, while the remaining $100 would come from coronavirus relief funds available in the state.
The new benefits will be available retroactively to qualified unemployment insurance recipients beginning the week ending in Aug. 1. The benefits have been approved by FEMA for four weeks, and the state will seek additional approval on a week-by-week basis. However, Bullock said funding is limited and will likely last only a few weeks.
The announcement came on the same day as the U.S. Employment and Training Administration said applications for unemployment assistance in Montana rose for the second consecutive week.
Over 2,100 Montana residents filed for unemployment during the week ending Aug. 22, an increase of nearly 12% from the previous week.
Commissioner of Labor and Industry Brenda Nordlund attributed some of the increase in claims to members of the gig economy filing for assistance in response to the expanded aid.
“We do believe that the $400 is driving some of that activity, and we also believe that a large percentage of those claims are fraudulent,” Nordlund said, adding that many of the claims filed by gig-economy workers are coming from out-of-state, an indicator that they are fraudulent.
Nordlund said a portion of the increase in unemployment claims could be because service industry sectors have been disrupted by COVID-19 outbreaks in the state, which cause businesses to shut down periodically due to exposure to the virus.
Health officials on Thursday reported 143 new confirmed coronavirus cases statewide, bringing the number of confirmed cases to nearly 7,000, as the number of new confirmed cases in the state remains steady but high, pushing hospital capacity in some parts of the state to its limit. The virus has killed at least 98 people in Montana.
The number of infections in Montana is thought to be far higher because not everyone has been tested and people can be infected with the virus without having symptoms.
Bullock said that despite new guidelines from the federal Centers for Disease Control and Prevention that say testing asymptomatic close contacts of confirmed cases isn’t necessary, Montana health care providers would continue testing those individuals.
“We can prevent large outbreaks by continuing to test asymptomatic contacts and finding cases earlier,” he said.
For most people, the coronavirus causes mild or moderate symptoms, such as fever and cough. For some, especially older adults and people with existing health problems, it can cause more severe illness, including pneumonia, and death. The vast majority of people recover.