By: Olkeriil Ngirudelsang

US Department of Labor has confirmed with WIOA Office in Palau that yes, the $1.3 million deducted as income tax to the Palau government will be returned to those whose assistance were taxed. 

In a phone interview with Director Ulengchong of WIOA, she said that “this is a long process as people started receiving assistance since July of last year till November. Some who received assistance have passed away and even one was discovered to be fraud.”

Director Ulengchong revealed “that a specific date on when this refund will be made has not been set. It will be announced once all paperworks are processed’. She added that they “have hired new staff who will be handling the processing of the final list of people who will be receiving this refund”. 

The financial assistance aimed to help those who were affected by the pandemic was not only taxed, it was also deducted for recipients’ social security benefits. Director Ulechong also said that “there has not been a confirmation response from the Department of Labor allowing Palau to waive the contributions deducted from such assistance to Social Security”.

While the Social Security has been making use of this money and have asked to this waived; according to WIOA Director, this is still being negotiated and no final answer has been reached on whether the waver is confirmed or denied. 

Earlier US Department of Labor had notified WIOA that the PUA and FPUC assistance should not have been taxed as these were benefits.  US DOL gave Palau government up until April 14 to provide a plan for refunding the money back to the recipients.  Social Security Administration have requested a waiver for the $700,000 remitted to SS as they were credited to individuals’ benefits.

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