Few are eligible for pandemic unemployment overpayment waivers

Posted at 6:04 AM, Aug 06, 2021
and last updated 2021-08-06 12:18:00-04

The federal government gave states guidance to waive overpayments made on pandemic unemployment programs earlier this year, but the I-Team found of the thousands who were overpaid, only hundreds received a waiver.

According to data provided by the Department of Workforce Development, the state's unemployment agency, 79,695 pandemic and regular unemployment insurance claimants were overpaid a total of $66.9 million ($4.5 million considered fraudulent) in the year 2020. It amounts to 1.4 percent of the total $4.8 billion in benefits paid out to claimants.

This year, through June, 41,928 claimants were overpaid $81.4 million ($8.4 million considered fraudulent), which was 4.4 percent of the $1.8 billion paid out.

But the department says only 4,125 claimants were notified they could be eligible for an overpayment waiver if they received an overpayment through one of the programs created under the CARES Act last year. Only 415 actually received a waiver.

"It's like having somebody hit you over the back of the head and you don't know what the heck's going on," said Susan Gault of Milwaukee.

Gault said she was told the DWD disqualified one week of her unemployment benefits in July of last year.

"I thought it was only a week," she said. "Well, it wasn't. It was $4,800."

It was $4,800 she needed to pay back. Gault said she did not receive notification for a waiver. Since the overpayment last year, she's nearly paid the entire $4,800 back.

"They've been taking part of what I owe on the $4,800 off of this $366, half of it, so what do I do?" Gault said.

Eligibility is a question of fault, according to the DWD. A spokesperson wrote, "...a claimant may be at fault for an overpayment if they provide information that they knew, or reasonably should have known, to be inaccurate or incomplete on an initial or weekly claim. A finding that the claimant was at fault does not necessarily mean that the claimant committed fraud or concealment. A claimant who is found to be at fault is required to repay overpaid benefits and is not eligible for an overpayment waiver under state and federal law."

"This whole waiver process they've made incredibly complex is it's now, and it's not obvious to any claimants," said labor attorney Victor Forberger. "It's obvious to me as a lawyer because I can read the language."

Forberger represents claimants who have been denied benefits, and are appealing the determination. He says even if you made an honest mistake that resulted in an overpayment, it's your fault under the law.

"Your misunderstanding does not count as a fault. It does not count as excusing your faults," he said. "In many cases, you have to understand the issue legally."

According to the DWD website, federal benefit overpayments can be waived if the recovery would be against equity and good conscience, meaning if making you repay the money would deprive you of income for basic needs, the department can waive recovery. But the issue of who is at fault for the overpayment still applies.

"People aren't getting rich on unemployment benefits," Forberger said. "They're spending that money right away as soon as they get it in to cover their expenses."

In June, Democrats in the Assembly introduced a bill that would block the department from collecting regular state unemployment overpayments in equity and good conscience, but it has not moved since.

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