WIOA (Workforce Innovation and Opportunities Act) is refunding about $300,000 to the recipients of PUA and FPUC assistance from CARES Act. These were monies deducted for income tax, Social Security contributions and retiree deductions.
WIOA Director Josephine Ulengchong, in an interview with Island Times, said that this was in addition to what the national government and Social Security Administration has to pay. The Government will have to refund $1.3 million of deducted income tax and SSA will refund $700,000 for SS and NHI/MSA deductions.
The recent notice from the United States Department of Labor advised that the Pandemic Unemployment Assistance and Federal Pandemic Unemployment Compensation are benefits and should not be deducted. This includes income tax deductions, Social Security contributions and deductions from payments of retired workers receiving pension and social security benefits. Working retirees who lost their other income as a result of COVID, but who were receiving income from SS and Pension, had the amounts of their retirement benefits deducted from their PUA and FPUC checks. These deductions are also being refunded by WIOA.
“In our prior trainings, we were told that we may deduct taxes but they didn’t clarify that we could if we are paying taxes to IRS. In fact, in our system it asks do you want 10% tax, and so we check yes. We had to go back now and uncheck that box,” stated Director Ulengchong. “The feds assumed that we (Palau) filed taxes to IRS like Guam which when they do deduct, IRS will refund it back to them. We don’t and so they came back and said we should not deduct taxes or SS.”
Director Ulengchong reported that they paid SS contributions up to June 30, 2020. Under SS law, the employee pays 7% and the employer pays 7%. Also for National Health Insurance, the employee contributes 2.5% and the employer contributes 2.5%. They were not sure who was to pay the employer’s contribution.
She said that after June 30, they stopped payments to SS pending instructions from the US government. Ulengchong also confirmed that they deducted SS contributions and income tax on payments issued after October to December but they didn’t remit to either agencies. Those, she said, are being refunded now by WIOA directly to the PUA recipients.
The issue of refunds has become problematic. At yesterday’s leadership meeting, Senator Jonathan Isechal posed a question whether the funding for refund payments needs to be authorized and appropriated by law. President Surangel Whipps Jr. said he does not believe that appropriation legislation is needed. President Whipps added that it will take up to next year to issue out all the refunds. Social Security Administration refunds may also be complicated, especially in refunding paid insurance premiums and MSA deposits.
Ulengchong admits that administration of the PUA assistance is complicated. She cited the Change 4 example, which limited eligibility by removing companies that have re-opened, saying that the Guam Governor wrote to the US Congress, the CNMI Congress wrote to President Biden, and other States lodged their complaints, which led to Change 5. She added that they are now waiting for Change 6.
In addition, two of their staffs have resigned and they’ve been working overtime to process everyone.
They say they have about 1,400 people filing claims. Director Ulengchong said they have enough funds to cover refunds and claims. “They approved the $5 million supplemental we requested,” she said. The $5 million is part of the $9 million reported to pay out claims under the America Rescue Plan Act until September 2021.

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