An unemployment overpayment takes place when a person receives unemployment insurance benefits that they were not entitled to. This could take place for various reasons including:
- They committed an error when claiming weekly benefits
- They were not ready, willing, and able to work
- They failed in completing the required work search activities for one week or more
- They intentionally submitted false or misleading information when filing a claim or claiming weekly benefits.
What You Should Do if You Receive an Overpayment Determination
If you are overpaid, you will receive a written notice in the mail.
Instructions
The Notice of Determinations to Claimants for Overpayment (the written notice) gives instructions on how to send a check or money order to pay the total amount of the overpayment due, including the overpayment benefits and any monetary penalties. It also delineates instructions on how to request a payment plan.
Other ways of the State collecting the unemployment overpayment
- Both overpayment benefits and monetary penalties can be collected by taking your federal or state tax refund.
- If you collected benefits in the future, those benefits will be offset to recover any remaining overpayment that you have not repaid.
- Any partial payment received by you will be applied first to the monetary penalties and then to the balance of the overpayment.
Legal consequences and rights
Failure to pay the monetary penalty could result in legal action against you. If you disagree with the overpayment determination, you have the right to request a hearing:
- The hearing will be requested by an impartial judge who is employed by the Unemployment Insurance Appeal Board.
- If you are present at the hearing and lose all or part of your case, you can then file an appeal to the Appeal Board.
Monetary penalty
The Department of Labor assesses a monetary penalty if it determines that you willfully made false statements or representations, or purposefully withheld pertinent information in order to obtain benefits. The amount of the monetary penalty is calculated based on the amount of the overpaid benefits.
Mistake on Certification
If you make a mistake on your weekly employment certification, call the Telephone Claims Center immediately at 888-209-8124 from Monday through Friday, 8 a.m. to 6 p.m. You can also send a secure message from your online account.
If you claimed for the entire week but you actually worked one or more days, you need to contact the Department of Labor. Failure to do so can result in your needing to repay benefits, plus be subject to civil penalties and the forfeiture of future benefits.
CARES Act
The U.S. Department of Labor has issued guidelines to permit greater flexibility for waiving the recovery of certain unemployment Insurance overpayments. The following updates concern the CARES Act unemployment benefit program:
- States may choose to waive recovery of overpayments under certain circumstances when an individual is not at fault. This can include situations where the state initially found the person eligible for unemployment benefits during a given week, but that person receives payments from the wrong CARES Act unemployment benefit program.
- Participating states must generally refund payments recovered prior to this guidance’s issuance if the state determines the individual meets the waiver provision.
- In cases where persons collected CARES Act benefits fraudulently, states must assess monetary penalties in addition to requiring repayments. Individuals who defrauded the program may also face criminal prosecution.
Impacts of Pandemic
According to Principal Deputy Assistant Secretary for Employment and Training, Suzi LeVine, “due to the unprecedented demand of the COVID-19 pandemic, millions of Americans have filed claims for unemployment benefits. This increase in demand has led to widespread over-payments in benefits.”
According to the Wall Street Journal, states overpaid billions in unemployment assistance after enhanced and extended benefits were approved last year, according to a federal watchdog. A Government Accountability Office report said the Labor Department found $12.9 billion in overpayments made in several unemployment programs from April 2020 through March 2021 including some benefit payments that were a result of fraud.
What to Do About Unemployment Overpayment
It’s not uncommon for states to overpay unemployment benefits, especially during the COVID-19 pandemic. This article covers the basic information concerning what to do if you receive an overpayment determination, monetary penalties, and the CARES Act unemployment benefit program. More details concerning forfeit day and monetary penalties may be appearing in a future article.
If you found this article helpful, you may find the below links useful as well!
How to Get a Refund for Taxes on Unemployment Benefits
Can You File Unemployment in Two States?
How to Transfer Unemployment to Another State
