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U.S. Department of Labor allowing states to waive recovery of certain unemployment overpayments

MD overpaid $1.8B in jobless benefits
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Posted at 2:28 PM, Feb 07, 2022

BALTIMORE — The U.S. Department of Labor issued new guidance Monday allowing states to apply a "blanket waiver" of recovery for certain unemployment insurance overpayments.

Last week, WMAR-2 News Mallory Sofastaii reported that the Maryland Department of Labor had overpaid more than $1.8 billion in unemployment insurance benefits. According to USDOL data, 99.98 percent of Pandemic Unemployment Assistance (PUA) overpayments were non-fraudulent, which means it could’ve been due to an error by the Department or the claimant.

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

USDOL acknowledged that increased demand for jobless benefits during the pandemic overwhelmed State Workforce Agencies, and in some cases, states paid benefits to individuals who were not entitled to receive them, although the individuals were not at fault.

USDOL is now allowing states to waive recovery of non-fraudulent overpayments, if they meet these five scenarios:

  • An individual responded “no” to being able and available for work and the state issued payment for Pandemic Unemployment Assistance or Pandemic Emergency Unemployment Compensation without adjudicating the eligibility issue.
  • An individual was eligible for payment and the state issued payment at a higher rate Weekly Benefit Amount under the Pandemic Unemployment Assistance or Pandemic Emergency Unemployment Compensation program.
  • The individual responded “no” to being unemployed, partially unemployed or unable or unavailable to work due to the approved coronavirus-related reasons, and the state paid Pandemic Unemployment Assistance. When asked to self-certify, the individual did not respond or confirmed that none of the approved coronavirus-related reasons applied and the state issued payment, resulting in overpayment for the week.
  • The individual submitted required proof of earnings used to calculate Pandemic Unemployment Assistance Weekly Benefit Amount and the state incorrectly processed the calculation resulting in a higher weekly benefit amount under the PUA program.
  • The individual submitted proof of self-employment earnings to establish eligibility for Mixed Earners Unemployment Compensation Program and the state incorrectly processed the information, resulting in overpayment.

According to USDOL, when states waive recovery of overpayment, collection activities cease. Fraudulent overpayments remain exempt from waiver and must be repaid.

WMAR-2 News reached out to the Maryland Department of Labor for more information on how this new guidance will be implemented. A spokesperson sent the statement below:

"We appreciate and welcome USDOL's guidance to help address a concern for qualified Maryland claimants who have been notified of an overpayment. We intend to implement this UIPL as soon as possible. As we’ve noted previously, the overwhelming majority of overpayments in Maryland stem from the federal government’s official guidance at the beginning of the pandemic to not require states to verify claimants’ income assertions with official documentation. This shifting policy caused a great deal of confusion for our customers.

Finally, as we continue to combat an increased level of fraudulent activity, it’s important to note this guidance does not aid scammers and bad actors trying to steal from Maryland taxpayers. Any overpayments that occur as a result of fraud are not eligible to be waived under this guidance."