In the early waves of COVID, more than ten million Americans were laid off, and Congress authorized emergency pandemic jobless benefits. In the scramble, some who were eligible were denied unemployment insurance benefits due to outdated and overburdened state systems. Other people got approved for benefits they weren’t entitled to or were overpaid, according to Marketplace.
Those improper payments can now be recovered by the states. Their efforts have recently increased, notifying people who thought they were in the clear that they must now pay back the money.
Fortunately, the Labor Department has stepped in to help.
States have started to send notices to people who received pandemic benefits in error over the past few months. Frequently, the notices state that the money must be repaid well over a year after benefits have been paid out.
Labor Department policy deputy director Michele Evermore said its department has released new guidance.
“We essentially made it easier for states to waive recovery of an overpayment in the case of an honest mistake. So that people won’t end up with massive, tens of thousands of dollars in payments, for something that wasn’t their fault,” she stated.
Millions of people are covered under the guidance, including gig workers, self-employed individuals, and those who could not work because of COVID.
“The pandemic unemployment programs paid out record sums, quickly,” said Andrew Stettner at the Century Foundation, who said the ramp-up was fast and furious and full of errors. Rules kept changing, and some state computer systems couldn’t keep up.
As a result, there were also some frauds and unintentional errors.
“Error payments that were made — not because someone was trying to deceive the agency — but a misunderstanding, or a misapplication — really agency error by the state. Should the worker be the one that’s subjected to that?” Stettner questioned.
In the District of Columbia, clawback efforts have intensified. The Legal Aid Society of D.C.’s Drake Hagner expressed concern for some of her low-income clients.
According to the new guidelines from the Labor Department, “waiving more of these overpayments that are no-fault, non-fraud, will be so helpful for workers, and for states. We don’t have to waste more time trying to claw back money that these workers don’t have anymore, it’s already been spent,” Hagner stated.