InvestigatorsMatter for Mallory


Maryland overpaid $1.8 billion in unemployment benefits; claimants worry they'll have to pay it back

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Posted at 6:00 AM, Feb 01, 2022
and last updated 2022-02-01 06:30:39-05

BALTIMORE — Many people are back to work, but their struggles with the Maryland Department of Labor aren’t over.

Claimants have been told they were paid too much, in some cases, tens of thousands of dollars. They've filed waivers to get those debts cleared, but WMAR-2 News Mallory Sofastaii continues to hear from claimants who say they haven’t heard anything back from the Department.

According to U.S. Department of Labor data, Maryland overpaid claimants nearly $1.9 billion since January 2020.

The state is only second to Ohio in total Pandemic Unemployment Assistance (PUA) program overpayments.

The Department said most of these overpayments are due to claimants not providing accurate income information and federal guidance not requiring verification before issuing payments.

Claimants blame the Department for not issuing the correct amounts or say the overpayment is an error.

“It was $3,900 they overpaid me,” said Lashley Mann.

“It says you have an overpayment of $14,700 something,” said Ethan Montgomery.

“They said I had an overpayment of $10,972. Not fraudulent,” said Janice Singletary-Mugar.

Before the pandemic, Singletary-Mugar demoed products at BJ’s.

“Being 70-some, you’re right in people’s faces, we couldn’t do the job, so they shut it down,” said Singletary-Mugar.

Mann worked on boats.

“All their customers stopped coming, everything stopped, so my job was lost,” Mann said.

And Ethan Montgomery is a sound engineer.

“Live entertainment was one of the first things to go, it was one of the last things to open back up, and even now, my income, my work isn’t where it was,” Montgomery said.

Pandemic-relief programs made these workers eligible for unemployment benefits, so they applied not thinking they would have to pay that money back.

“It was them that determined this is what my benefit should be. They were giving me the minimum until they looked at the documents that they asked for and then they said, 'No, you actually max out the benefit,'” Montgomery said.

Montgomery said he provided accurate income information and shouldn’t be responsible for the $15,000 balance.

Overpayment waivers
The Department is accepting waivers to forgive non-fraudulent overpayments.

USDOL data shows 99.98 percent of overpayments were non-fraudulent, which means it could’ve been due to an error by the Department or the claimant.

The Department has received nearly 8,000 overpayment waiver requests since August. Roughly half have been waived and the other half is still pending. A spokesman said the Department has a dozen people working on these waivers on any given day. They’re processed in the order received and they’re currently working on waiver requests from late November.

Montgomery and Mann filed waivers several months ago but haven’t yet received a response.

“I was supposed to get a certain amount and they took half of it every week to go to the overpayment. And I’m like hey, I kind of need that, I have a baby. I have to pay my rent,” said Mann. “I was trying to get a hold of them every day and it started weighing on me."

Claimants, like Mann and Montgomery, say they want more communication as the decision on these large debts hangs over their heads.

“I’m supposed to be getting married next year, hoping to buy a house. Well, I can tell you $15,000 goes a long way in terms of a down payment on a house, so if I have to give them $15,000, buying a house after I get married is probably off the table. I don’t know,” said Montgomery.

National group asks Congress to waive overpayments
The National Association of State Workforce Agencies (NASWA) sent Congress a letter on January 7 asking it to allow states to waive all non-fraudulent overpayments for pandemic programs.

Sofastaii reached out to NASWA to see if they’ve received a response yet and if they support waiving non-fraudulent overpayments in the regular unemployment insurance program. This story will be updated with their response.

A spokesperson for the Maryland Department of Labor said it supports NASWA’s request. In the meantime, the Department has paused recovering overpayments, offsetting benefits to recover overpayments, and won’t intercept any state or federal tax refunds to recover overpayments.

Overpayment refunds
The Department is also issuing refunds to claimants who had started paying their overpayment balance, then had it waived.

According to a Department spokesman, the total calculated refund amount to claimants is roughly $6 million. Out of this $6 million, $2.2 million has already been refunded. The Department did not provide a timeline for when the remaining amount will be issued but said they are working as quickly as possible to process refunds and are hiring additional staff to assist with this process. Checks are being sent through the mail.

Claimants can still file overpayment waivers. Click here for a link to the form.