States must refund unemployment benefits they clawed back in error

Jobless claims will be distributed to people in front of the John F. Kennedy Library by Hialeah City staff on April 8, 2020 in Hialeah, Florida.

Joe Raedle / Getty Images

However, the CARES Act did not provide a safety valve for states to overpay. Essentially, that meant that states had to try to collect the funds.

Texas, for example, sent notices to approximately 260,000 PUA recipients between March 1 and October 1, trying to reclaim $ 214 million.

Refunds and waivers

A $ 900 billion bill passed in December allowed states to forego benefits overpayments.

According to the U.S. Department of Labor, states that choose to have this forgiveness must issue reimbursements to workers who have repaid all or some of their benefits before receiving a waiver.

“It may take some time (up to a year, for example) for states to process such refunds and states are encouraged to contact the ministry for technical assistance,” the agency said in Wednesday issued guidelines.

States can overpay if an employee is not at fault and recovering funds would cause financial difficulties, for example.

States have many options for obtaining what is considered to be overpaid benefits. For example, you can cut ongoing benefits, garnish tax refunds, intercept lottery winnings, and sue individuals for help back. Some charge interest on outstanding balances.

“In many cases, individuals have received payments that they may not have been entitled to through no fault of their own,” said Suzi LeVine, assistant general secretary for employment and education.

“The guidance issued today by the Department of Labor will help states address this important issue and provide them with more flexibility to avoid reclaiming improper payments from honest workers who continue to experience difficulties and in dealing with cases where there is real cheating, giving directions, “she added.

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