States Must Refund Some Unemployment Payments They Took Back — Is Yours Among Them?
In a memo released yesterday, the U.S. Labor Department states that workers who were asked to repay unemployment benefits received through the CARES Act might be able to get a refund, although it could take a year before you see the money.
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Many workers received Pandemic Unemployment Assistance through the CARES Act, which was signed into law in March 2020 and designed to provide benefits to the unprecedented number of people filing unemployment claims — people who, in many cases, otherwise would not have been eligible for state benefits. Due to the emergency situation, states rushed to fill the claims, later realizing that some had been paid by mistake due to errors by both the states and the applicants, CNBC reported.
The $900 billion stimulus and relief package passed in December 2020 allows states waive recovery of those overpayments, essentially forgiving them, in some instances. The Labor Department acknowledged in yesterday’s memo that the CARES Act “required states to make significant changes to their administration of the programs” and that these changes “made it challenging for states to properly administer the programs, resulting in overpayments.” It goes on to say that “it would be extremely unfair to require individuals to repay overpayments which occurred as a result of the administration of the various programs and the CARES Act.”
Some states, though, have already requested money back. CNBC reported that Texas sent out notices to about 260,000 recipients between March and October 2020 and “tried to claw back $124 million.” States that opt into forgiveness of these overpayments must now issue refunds to workers who repaid some or all of their benefits prior to to the waivers. It may take up to a year for states to process these refunds, according to the Labor Department memo.
See: Millions of Americans Reaching End of Their Unemployment ‘Benefit Year’ Could Face Gaps in Extending Payments
Find: Reasons Your Unemployment Claim Was Rejected — And How To Fix It
A state may only waive repayment of an overpayment if it determines that the overpayment was not the fault of the worker, and repayment “would be contrary to equity and good conscience,” according to the memo.
The memo adds that when assessing whether an individual overpayment may be waived, the state should take into account whether or not:
Repayment would cause financial hardship to the recipient
The recipient can show that the notice of the repayment requirement or incorrect payment caused them to relinquish a valuable right or changed positions for the worse
Recovery would be “unconscionable under the circumstances”
The United States is entering its second year of a pandemic that has had severe consequences on the economy and individuals’ ability to find and maintain employment. Since the beginning of the pandemic, unemployment has ranged from 14.8% at its peak to its current 6%, which is almost double the unemployment rate for the three years prior to the pandemic.
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This article originally appeared on GOBankingRates.com: States Must Refund Some Unemployment Payments They Took Back — Is Yours Among Them?
