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Which States Are Asking To Repay The Overpaid Unemployment Benefits?

Updated : October 28th, 2020

Millions of Americans were paid Unemployment Insurance (UI) benefits. While some received the entitled amount, many others were mistakenly overpaid. Since the overpayment is against the federal laws governing UI benefits, many states are asking to repay the overpaid unemployment benefits. This article will tell which states are trying to recover the overpaid amount and what you should do if you are overpaid. 

States That Are Asking To Repay The Overpaid Unemployment Benefits

Many states are asking claimants to repay the extra or overpaid unemployment benefits. Some of them include: North Carolina, North Dakota, Ohio, and Texas

While the Texas Workforce Commission (TWC) overpaid about 185,000 people between March 1 and September 15, under the regular UI program, the Department of Job and Family Services, Ohio, paid about 108,000 people eligible for the Pandemic Unemployment Assistance program (PUA).

States can waive repayments of certain unemployment benefits programs. But the PUA program, which was established under the CARES Act to provide benefits to the self-employed, gig workers, independent contractors, and others who are otherwise not qualified for the unemployment program, is administered differently than other types of unemployment programs. Hence the states would ask the claimants to repay the overpaid amount.  

Reasons For Overpayment Of Unemployment Benefits 

There are various reasons for the overpayment of unemployment benefits. Some of them include:

  • You have accidentally entered incorrect earnings
  • The state has miscalculated the amount of the benefit
  • You have not informed the state that you have begun a new job
  • You have intentionally given incorrect or misleading information when filing a weekly claim 

What Happens If You Are Overpaid?

If you are overpaid, the Department Of Labor (DOL) of your state will notify you about your state trying to recover the additional payments. The notice may also indicate that you were overpaid or get lower unemployment benefits or no benefits until the additional payments are recovered. The Department of Labor can change the amount of your entitled benefits based on new information about your work search activity or any other crucial factors. 

What To Do If Your State Asks You To Repay The Overpaid Benefits?

Suppose you receive a notice from the DOL regarding the overpayment but do not agree with it. In that case, you have the right to determine if the Department believes you were overpaid or if your unemployment benefits will change. This can be done through a fact-finding interview.  

During the interview process, you will have to give all the information and evidence that supports your claim to the Deputy. The Deputy will review your case and send the judgment in writing. 

If you were overpaid due to no fault of your own or incorrect information you submitted mistakenly, you could consider filing an appeal or an overpayment waiver. 

How To File For Overpayment Waiver?

If you believe that overpayment was not your fault and you cannot repay the additional amount, you can file an overpayment waiver. You can request an overpayment waiver by filing the Social Security Administration (SSA) form. 

After filing the form, do any of the following to prove that you have requested the waiver in writing. 

  1. Get 2 copies of the form to the SSA office and request them to date stamp the copies. Give them one copy for records and another keep for yourself. 
  2. Fax the form to the Social Security office. Keep the fax confirmation printout. Also, make sure that Social Security has received the fax.  

SSA will receive your form and decide if the overpayment was due to your fault or not. It will also determine if you promptly informed them about your income and your present financial situation. If SSA determines that you have been receiving additional payments but haven’t informed the authorities, it will consider the overpayment was due to your fault. 

What Happens If You Get The Waiver?

If you get the waiver, some or all of the repayment may be suspended. If your overpayment is partially waived, the state will recover the remaining amount by deducting from your future unemployment benefits.

What Happens If You Do Not Get A Waiver?

If your waiver gets rejected, you will have to repay the overpaid amount to the state. The overpayment collection process varies from one state to another. While some states like Illinois recover the overpaid amount by asking the individuals to allow the state to keep up 25% of the future unemployment benefits, states like North Carolina let individuals repay the amount by credit, debit card, or money order. 

Determine how your state’s overpayment collection process works and negotiate a payment plan. If you fail to repay or make a payment plan, the Labor Department may issue a civil warrant to recover the payment. Your lottery winnings or state income tax refund can also be used to repay the overpayment. 

File An Appeal With Supreme Court

If you still believe that you are eligible for a waiver, you can file an appeal in Superior Court (80C appeal) but within 10 days from the date of receiving the waiver rejection. 

The Superior Court will examine the facts and evidence (if any) submitted by the Department. If the Court finds the Department’s decision unconstitutional, it may change the Department’s decision regarding your waiver appeal. 

Note – If the overpayment was a mistake, you would be required to pay 1% monthly interest, starting one year following the overpayment.

Closing Thoughts 

If you suspect or believe there is a mistake in the amount of benefits you are receiving, then keep your expenses under control as you can repay the Department Of Labor, if it sends you a notice of overpayment at any time. But if you believe that you are not receiving the entitled amount, file an unemployment appeal. 


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