Washington, DC – U.S. Senator Kirsten Gillibrand today revealed that Long Islanders are being forced to pay back federal disaster assistance they received following Superstorm Sandy, and introduced her legislation, the Sandy Duplication of Benefits Fairness Act, to protect Sandy survivors and ensure they can keep the grant funding they received through the New York Rising program. Immediately after Superstorm Sandy, the Federal Emergency Management Agency (FEMA) told New Yorkers that in order to receive any federal disaster assistance, they must first apply for a loan through the Small Business Administration (SBA). Many households took out these loans, as suggested, in order to get back on their feet and remain eligible for other forms of federal assistance.
Despite being advised to take out SBA loans in order to be eligible to receive additional federal assistance, a federal rule prohibits disaster survivors from receiving “duplication of benefits.” This means that they are not allowed to also receive grant funding to rebuild their homes through the Department of Housing and Urban Development’s Community Development Block Grant for Disaster Relief (CDBG-DR) program, which was administered through the New York Rising program for households on Long Island. New Yorkers who were approved for New York Rising funds and received the CDBG-DR funding several years ago are now being told that they were not eligible for grant funding at the time and must now pay it back. Gillibrand’s Sandy Duplication of Benefits Fairness Act would waive the duplication of benefits rule for Sandy survivors, ensuring that New York families are not forced to pay back money that has already been spent to fund their recovery from the damage and destruction of Superstorm Sandy.
“Communities across Long Island are still recovering from the damage caused by Superstorm Sandy, even seven years after the storm hit. Many homeowners on Long Island were advised by the federal government that they needed to apply for SBA loans in order to receive any disaster assistance, and are now learning that if they received additional grants, they have to pay that money back because of a technicality they were not warned about,” said Senator Gillibrand. “This has blindsided many families, and homeowners caught under the ‘duplication of benefits’ rule are being forced to pay back the grant money they were depending on to recover from the storm. My bill, the Sandy Duplication of Benefits Act, would authorize HUD to waive this requirement for Long Islanders, ensuring that they can keep these critical funds.”
Following Superstorm Sandy, Long Island households received disaster assistance grant funding through the New York Rising program, and are now being told that they must pay that money back because they also took out a SBA loan. This means that people who are currently paying back their SBA loans are also now being told that they have to return grant money that they may have already spent. The result is that they may have to take out additional loans to cover the cost of the recoupment. In many instances, homeowners are being told to pay back tens of thousands of dollars. People may now be in danger of incurring additional debt on top of their Sandy losses and even potentially losing their homes.
Last year, Congress enacted legislation that waives the duplication of benefits restriction to allow SBA loan recipients to be eligible to receive disaster relief grants, like those administered by New York Rising, but only made the fix retroactive to 2016. Gillibrand’s legislation, the Sandy Duplication of Benefits Fairness Act, would make the duplication of benefits fix retroactive to October 1, 2012 to make Sandy survivors eligible to keep the CDBG grant funding even if they also received an SBA loan.