Many Pandemic Unemployment Assistance recipients are on the hook for overpayments, regardless of fault.
When Congress passed the CARES Act in March, the PUA program became a lifeline for millions of Americans and has since provided billions of dollars in direct relief. However, to the horror of many recipients nationwide, they're now being asked to return some or all of their benefits. In recent months, states like Illinois, Ohio, South Carolina, Texas, and many others have sent out overpayment notices demanding repayment.
Good news: you’re approved for unemployment.— Tim McNicholas (@TimMcNicholas) December 11, 2020
Bad news: IDES overpaid and you owe thousands back.
That’s a reality for people all over the state but in some cases, with people on tight budgets, the funds are already spent. @cbschicago pic.twitter.com/6X55d0WjbN
Overpayment can happen when an applicant commits fraud, but most of these cases stem from confusing applications, processing errors, and a rushed rollout of PUA benefits. Gig workers were particularly affected because their income documentation is different from what the system normally processes. Some people that were told they didn't qualify for regular UI benefits are now being told that they did qualify and that they have to repay all of their PUA benefits.
These notices come months after people received and spent what they believed to be legitimate benefits to cover basic necessities like rent and food. For some, it was already barely enough to get by. States were late to catch overpayments because they spent months prioritizing other issues and working through backlogged claims. In the meantime, claimants have racked up thousands in overpaid benefits.
Hear about this all the time from readers -- unemployed people who were accidentally overpaid UI benefits, months later suddenly getting hit by enormous repayment bills despite struggling to make ends meet.— Jeff Stein (@JStein_WaPo) December 11, 2020
Excellent story by @gillianreporter https://t.co/wLHUnIoOfn pic.twitter.com/RWPvGt9ZPd
Usually, states would either waive accidental overpayments or allow claimants to appeal the decision, but federal rules prohibit forgiveness for PUA overpayments. To collect them, states will first start reducing weekly benefits (sometimes to $0). If you're no longer receiving benefits, you can have your wages garnished, tax refunds withheld, or even have a lien placed on your home. For many, this news couldn't come at a worse time with the holidays right around the corner.
•Get unemployment after 5 months of waiting which gives hope for Christmas— Tyler Schnitker (@TylerSchnitker) December 10, 2020
•Get told I was overpaid and didn't have a right to it due to a clause that says I DO have a right to it
•Mental panic ensues and Christmas goes out the window
Luckily for some, states like Colorado have decided to write off 30,000 or so overpayments after determining their PUA application was confusing. Some claimants may have already repaid part, if not all, of their overpayment balance. If so, they have the option of filing an appeal, though it doesn't necessarily mean they will be successful in getting that money back.
Colorado also recently sent out $375 stimulus payments to qualifying claimants—which most states didn't or couldn't do. Governor Jared Polis acknowledged that people still need more assistance, saying, "We know that Colorado or any state can only do so much, and national help is urgently needed."
Hopefully, that national help is on the horizon. Congress is expected to finally pass a new COVID-19 relief package this week, though it likely won't provide as much direct relief for Americans as the CARES Act. Representative Jaime Herrera Beutler introduced an amendment that would provide a hardship waiver for PUA overpayments, but we'll have to see if it makes the cut.
Have you received an overpayment notice? Share your experience with us in the comments.