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The state says it overpaid your unemployment benefits. Now it demands the money back

Posted at 9:47 AM, Dec 14, 2020
and last updated 2020-12-15 10:21:31-05

This article was written by David Staats of the Idaho Statesman.

Is this you?

You’re an Idahoan who lost your job when the coronavirus wreaked havoc. You needed an income. So you applied for unemployment benefits. You started getting payments, week after week.

Suddenly, the online portal you used to certify your weekly eligibility coughed up an unpleasant surprise: You were overpaid. You must pay thousands of dollars back to the state.

But the money is long since spent. You don’t have much in your bank account. What do you do?

More than 11,000 weekly overpayments were reported by Idaho’s Department of Labor in the third quarter of this year as the pandemic raged. The overpayments affected thousands of Idahoans.

Most of the overpayments, 97% according to the department, resulted from mistakes made by people claiming unemployment benefits. For example, they may have taken a week’s vacation and traveled outside the area where they live. That’s prohibited.

But some mistakes are made by the department. If you had no way to know that the department was overpaying you, state law says you can keep the money.

That can be a hard fight to win.

IDAHO GETS TOUGH ON OVERPAYMENTS

Unemployment insurance became a lifeline for tens of thousands of Idahoans thrown out of work this year. In April, more than 103,000 workers were jobless at one point, sending the state’s jobless rate to a record 11.8%.

Thousands still depend on the money. The latest unemployment report, for October, showed 50,000 Idahoans unemployed and a jobless rate of 5.5%.

Besides the state’s regular unemployment program, Congress passed a virus-relief law in March that provided three temporary programs to help workers who lost jobs or self-employment income because of the pandemic. The costliest program, providing $600 supplements to regular state weekly payments, ended in July. The other two programs, paying benefits to the self-employed and extending exhausted state benefits by up to 13 weeks, expire Dec. 26. Congress has talked for months about adding new benefits but has yet to agree on a bill.

The temporary federal benefits fell to Idaho Labor to administer alongside the regular state benefits.

For years, the Idaho Legislature has placed a high priority on making sure people receiving unemployment compensation get only what they’re entitled to and no more. You must answer a long series of questions to start getting the money. Your answers must be consistent with what your employer has told the department about your pay and work history. And you must recertify your status for each week you seek payment. A false report can bring a felony charge with a fine up to $50,000 and a prison term up to five years.

Making sure money is not misspent is one reason Idaho was among the slowest states to get supplemental federal pandemic payments out quickly last spring. That forced tens of thousands of people suddenly without incomes to wait weeks or months for that money.

But the tough enforcement policy pays off both in limiting overpayments and clawing back those that get through, said Larry Ingram, the chief of Idaho Labor’s Unemployment Insurance Compliance Bureau.

Idaho recovered 132% of its overpayments in the 12 months ending July 31, compared with 63.5% nationally, according to the U.S. Department of Labor.

“Idaho is very good at recovering the overpayments,” Ingram said by phone.

How can Idaho recover more than it paid out? Actually, it didn’t. Idaho lately has been collecting overpayments from past years dating back to the Great Recession, resulting in temporary surges in its overpayment-clawback rate. Ten years earlier, the recovery rate was 45%.

The state plays a long game. You may not have the money to pay back now, but the state knows you may later.

If you can’t pay immediately, the state will ask you to commit voluntarily to a repayment plan. A worker who owes $1,200 might be asked to pay $100 per month for a year.

“Most people cooperate,” Ingram said, then added: “A lot don’t.”

For the uncooperative, the state turns to a nationwide program authorized by federal law to take money out of income-tax refunds or Social Security payments. Idaho Labor sees a surge in repayments each year at tax time.

The state can also take legal action to garnish your wages. It must leave at least the minimum wage in your paycheck, and its claim may fall behind child support among your paycheck commitments.

OVERPAYMENTS CAN AMOUNT TO THOUSANDS FOR A SINGLE WORKER

The average weekly overpayment among the 11,222 third-quarter overpayments was $127, Ingram said. The most common situation is a one-week overpayment, for someone still eligible for unemployment benefits, that the state takes back the following week.

The department tracks overpayments by weekly payments, and one person can rack up multiple overpayments. A recipient getting that $127 average overpayment for 26 weeks would owe more than $3,300.

Of the $1.7 million paid out in those 11,000-plus third-quarter overpayments, the state waived $127,000, Ingram said. That’s about $1 for every $13 in overpayments.

Recovered state money goes back into the fund to pay future benefits. Except for federal benefits like those Congress authorized for the pandemic, unemployment compensation is funded primarily by a state tax on employers, not employees. Recovering money helps keep the tax from rising needlessly.

Idahoans have received $930 million in pandemic-related unemployment benefits through Nov. 28, the department said. Of that:

  • $216 million came from regular state benefits.
  • $540 million came in the $600 weekly federal pandemic supplements to state benefits that ended in July.
  • $88 million has come in federal pandemic payments to the self-employed.
  • $44 million came in the federal 13-week pandemic extension of expired state benefits.
  • $43 million came in a federal lost-wages assistance program that President Donald Trump created by executive order after the $600 supplements ended last summer and Congress could not agree on an extension. Trump tapped previously appropriated emergency funds to pay $300 per week for five weeks.

HOW TO APPEAL AN UNEMPLOYMENT-COMPENSATION DECISION

Workers who think they’ve been wronged should first call or email Idaho Labor to request an explanation and reconsideration. If you’re turned down or cannot get anyone to reply to you, you can appeal.

First appeal: to Idaho Labor’s Appeals Bureau. You must do this in writing within 14 days of the day the department mails you its determination that you owe money or are ineligible for benefits. You don’t have to fill out a form, though the department has one that makes it easier by providing fields to complete and instructions. You can email it to appealsmail@labor.idahogov or hand-deliver or mail it to Appeals Bureau, Idaho Department of Labor, 317 W. Main St., Boise, ID 83735-0720. You’ll be mailed a notice of a hearing date. Your appeal will be heard by telephone by a hearing judge.

Questions? Call the Appeals Bureau at (208) 332-3572 or (800) 621-4938.

Second appeal: to the Idaho Industrial Commission. You must do this in writing. You must be represented by, or yourself be, an attorney. Mail it to: Idaho Industrial Commission Judicial Division, IDOL Appeals, P.O. Box 83720, Boise, ID 83720-0041. Or hand-deliver it to the commission office in Building 2 of the former Hewlett Packard campus at 11321 W. Chinden Blvd.

Questions? Call the commission at (208) 334-6042.

Third appeal: to the Idaho Supreme Court. You don’t need a lawyer to do this — the Supreme Court allows “pro se” litigants. But appeals are complex, so it’s wise to get a lawyer with appellate experience.

Questions? Call the court clerk at (208) 334-2210.

How to get free legal help: Can’t afford a lawyer? Idaho Legal Aid Services Inc. offers free legal services to low-income Idahoans. So does the Idaho Law Foundation’s Idaho Volunteer Lawyers Program. Call Idaho Legal Aid at (208) 746-7541 or the Idaho Volunteer Lawyers Program at (208) 334-4500.