Michigan unemployment agency to pause collection activities for all pandemic overpayments

Adrienne Roberts, Detroit Free Press
·3 min read

Michigan's Unemployment Insurance Agency will suspend collection activities for all claimants who were told they were overpaid jobless benefits in the pandemic.

The pause on collection activities — which can include garnishing claimants' wages or seizing tax returns, for example — applies to overpayments related to claims filed starting March 1, 2020, and going forward and comes as part of a court order in a class-action lawsuit against the agency.

Implementation of the suspension is expected to begin next week, the joint status report, which was filed with the Michigan Court of Claims on Thursday, said.

Michigan's Unemployment Insurance Agency's pause on collection activities — which can include seizing tax returns, for example — applies to overpayments related to claims filed starting March 1, 2020 and going forward.
Michigan's Unemployment Insurance Agency's pause on collection activities — which can include seizing tax returns, for example — applies to overpayments related to claims filed starting March 1, 2020 and going forward.

The pause on collection activities — which lasts until the agency works through a backlog of claims and the court agrees to terminate the preliminary injunction — is broader than what the court required. In August, Court of Claims Judge Brock Swartzle clarified that the suspension applied to any claimant with an overpayment letter who appealed or protested the decision and who has yet to exhaust all their options (not just the plaintiffs named in the lawsuit).

Julia Dale, the director of the state's UIA, said in an interview Thursday that the litigation has provided the agency with broader authority to halt collection activity. Previously, the agency was requesting authority from the U.S. Department of Labor to pause collection activities, and those pauses were limited in time and scope.

The court-ordered pause, though, has taken at least five months to implement, a process that Dale called "no small feat."

"It takes a significant amount of technical effort and expertise to make those changes to the system to accommodate such a broad-ranging pause on collection activity," she said.

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David Blanchard, the attorney representing the claimants suing the agency, said it's unfortunate it took so long to get to this point, but he's happy the pause is coming.

"I'm so glad that it will take one piece of stress out of people's lives for the foreseeable future and for the holidays," Blanchard said. "I hope (the scale of this) communicates to the people of Michigan that you're not alone. You didn't do something wrong. It wasn't you. It really is the computer system."

Dale said the agency is still working to determine how many claimants the pause applies to. There are some indicators. More than 54,000 claimants were subject to collection activities even though there was a pending protest or appeal, according to a September court filing. The agency was attempting to collect $783 million from those claimants. There were 274,000 pending appeals on the agency's computer system and 45,000 pending appeals via web chat, leading Blanchard to believe that the suspension will affect hundreds of thousands of claimants.

The UIA has issued 76,000 waivers this year with a total value of more than $555 million. Dale said the agency is working to identify additional waiver populations.

"We're going to continue to issue waivers into the new year so that process has not stopped and won't stop," she said.

Contact Adrienne Roberts: amroberts@freepress.com.

This article originally appeared on Detroit Free Press: Michigan UIA to pause collections for all pandemic overpayments