Department of Workforce Development to pay back some unemployment overpayments, per federal guidance

Wisconsin unemployment hit record low in December
Posted at 3:56 PM, May 07, 2021
and last updated 2021-05-07 19:58:05-04

If you're one of the tens of thousands in Wisconsin who were mistakenly overpaid unemployment benefits and you started paying them back, the state may be returning money to you.

Many waited months to receive their unemployment benefits, they were told to pay some or all of it back.

Now many are finding out they may not have had to pay it back, and if they did, they may be getting that money sent back to them.

The Wisconsin Department of Workforce Development told the I-Team it overpaid close to 80,000 people in 2020.

New guidance from the U.S. Department of Labor this week says states can choose to waive people's overpayments if it's not the person's fault.

That's some relief for Judy Henderson, who told the I-Team earlier this year she can't afford to pay back the $2,800 she says the state mistakenly overpaid her.

"I feel like that it wasn't our fault they gave us this money," Henderson said.

If the state already collected payments from those who were overpaid, the DOL says states have a year to process refunds.

Henderson, who struggled to navigate the unemployment system because she's visually impaired, says this entire process has been exhausting.

"I've been dealing with it every day since March, and I'm still dealing with it," Henderson said.

In an email, a spokesperson from the DWD told the I-Team:

"We are waiving overpayments when someone is not at fault and they can demonstrate they meet the Equity and Good Conscience provision. Our Unemployment Insurance Division has sent letters and applications on the claimant portal to people who may qualify for a waiver, and we really do encourage people who got those notifications to apply. DWD is still reviewing the new DOL guidance, but we will begin issuing decisions and payments after May 26 under our existing overpayment waiver policy. These payments are a priority, so we definitely do not expect them to take a year."

The spokesperson also said, "It’s important to note that people who have overpayments but don't qualify for a waiver can set up a payment plan, and we will work with them to develop a timeline to pay back the overpayments that meets their individual circumstances."

Some waited months for unemployment, now they're told to pay part of it back

The DWD also told us 79,659 people were overpaid a total of $66 million in 2020. Those overpayments include those made based on claimant fault, as well as fraudulent payments. The department also notes the total overpayments amounted to 1.3 percent of the total UI payments made last year, which added up to $4.8 billion.

Labor Attorney Victor Forberger, who represents unemployment claimants struggling to navigate the system, told the I-Team he's concerned about overpayments made when a person makes an honest mistake on their claim.

"The department presumes if you make any kind of error, it's your fault," he said.

He's worried some may still have to pay it back with an additional penalty if they are suspected of fraud.

"It's not like the person provided misleading information, they just provided wrong information," Forberger said.

Henderson says all of this aside, she's still trying to collect benefits she believes she's owed from the state.

"My friend helped me read my letter to find out what's really going on with this and I'm waiting on a decision from them, but I haven't gotten the decision yet," Henderson said.

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