CT businesses will be spared from unemployment tax hikes for now.

The Department of Labor is getting unemployment benefits out the door faster, but one-fifth of all recipients delay their funds for weeks by not providing bank account information.

That means more than 70,000 of the 360,000 unemployment claims filed since mid-March were submitted by residents who don’t have a savings or checking account that could receive an electronic transfer — or who haven’t provided that information when they filed a claim.

“If we can do direct deposit you will have the funds within two business days” of claim approval,” said DOL spokeswoman Nancy Steffens.

Gov. Ned Lamont and labor officials announced earlier this week that emergency programming revisions to the department’s nearly 40-year-old IT system will reduce a six-week average wait time to seven days by April 25.

Unemployment filers who have a bank account are urged to use the electronic transfer option.

If an electronic transfer is not possible, the department — liked most other states — stopped mailing out checks years ago, and now provides debit cards.

Normally it takes the department’s vendor about one week to process cards once benefits have been approved. But with unemployment claims surging in every state as they deal with the coronavirus pandemic, “we’re seeing a nationwide shortage of debit cards,” Steffens said. “Vendors are having trouble getting the plastic.”

Connecticut officials are working to mitigate the problem, but the labor department has been warned vendor delivery time could grow from one week to four, Steffens said.

The best way around that problem, labor officials say, is for residents to establish a bank account.

The FDIC says as many as 6.5% of Connecticut households — about 84,600 people — are “unbanked” with no savings or checking accounts. 

Most live in the state’s poor urban centers and already have fallen through the cracks of other coronavirus relief efforts.

Residents without a bank account on file with the Internal Revenue Service are expected to face a delay of several weeks before receiving a federal stimulus check this spring. Eligible individuals can receive up to $1,200, and couples up to $2,400, through this program.

According to Matt Smith, spokesman for the state Department of Banks, which regulates state-chartered banks and credit unions, these institutions are permitted to register new customers online. Smith added that institutions which offer this service may seek additional verification data online if they cannot meet with a new customer face-to-face.

The Department of Labor can transfer funds electronically to a savings or checking account, providing it has the account and routing numbers and the recipient’s Social Security number, Steffens said.

The labor department also is reminding residents that an unemployment claim can be filed online using a computer, tablet, or a smart phone — or even a trusted relative or friend’s device — and that the process normally takes less than 20 minutes.

Residents who lack access to any of these devices normally could use a free computer at the labor department’s American Jobs Center or at a local library, but those are closed during the pandemic.

The labor department still maintains three telephone lines for claims filing, but Steffens warned they are experiencing long delays due to heavy demand.

The English-language lines are 860-263-6975 and 203-455-2653. The Spanish line is 203-548-7322.

Lines are open from 8 a.m. to 4 p.m., Mondays through Fridays.

Keith has spent most of his 31 years as a reporter specializing in state government finances, analyzing such topics as income tax equity, waste in government and the complex funding systems behind Connecticut’s transportation and social services networks. He has been the state finances reporter at CT Mirror since it launched in 2010. Prior to joining CT Mirror Keith was State Capitol bureau chief for The Journal Inquirer of Manchester, a reporter for the Day of New London, and a former contributing writer to The New York Times. Keith is a graduate of and a former journalism instructor at the University of Connecticut.

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