Some states have overpaid unemployment benefits and want to be refunded

Unemployment benefits are designed to help unemployed adults pay bills while they look for new jobs. But the aid has become a headache for tens of thousands of people in Ohio, Pennsylvania and other states who were mistakenly overpaid by state unemployment agencies — and are now being asked to return the money. Writes about this CBS News.

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Ohio officials said more than 160 people received overpayments in August and September through unemployment benefits, as well as through the federal Pandemic Unemployment Assistance (PUA) program, designed to help self-employed workers and others who are usually ineligible. for unemployment benefits.

States are either asking recipients for refunds or deducting funds from their current unemployment checks, exacerbating the financial stress of unemployment during the pandemic. In some cases, the overpayment was due to the applicants misrepresenting their income, but errors by Department of Labor staff and computer errors also played a role. In Pennsylvania, for example, an employee re-processed payments, causing people to receive too much money.

According to Andrew Stettner, senior fellow at The Century Foundation and an unemployment expert, these challenges underscore the need for increased investment in the unemployment system.

“We had a lot of signals that the system was not getting enough investment,” he said.

To be sure, the number of people overpaid is a small fraction of the 26,5 million jobless claims filed in the last week.

"We understand the frustration"

“We understand that overpayments are frustrating during this already stressful time, and we are committed to doing everything we can to alleviate these hardships within the bounds of state and federal law,” said Tom Betty, a spokesman for the Ohio Department of Labor.

In Ohio, about 20% of PUA applicants received overpaid payments by the end of August, or about 108. Another 000% of permanent beneficiaries of unemployment assistance, or about 7 people, received an overstated amount of money in September.

On the subject: 10 US regions with the highest unemployment rate

Texas and Colorado also overpaid unemployment claims: The Texas Human Resources Commission said it overpaid $ 1 million to approximately 15 people from March 203 to September 185. A Colorado official said many of the overpayments were due to people misreporting their income, which affects benefits.

How states calculate unemployment benefits

Each state has its own formulas for calculating regular unemployment benefits, usually based on the worker's earnings before they lose their jobs. The higher their income, the higher the amount of the benefit, although the amount is usually capped at a maximum.

Under the CARES Act, the unemployed also received an additional $ 600 in weekly assistance, although the order expired in July. PUA benefits are also income-based and include an additional $ 600 weekly benefit.

Due to delays in receiving unemployment assistance, many people were receiving several payments at the same time, so the amount seemed much higher than the norm.

Those who receive an overvalued check in Ohio and continue to receive unemployment benefits will be deducted from their accounts until the money is returned. Recipients who have overpayments due to agency errors do not need to return the money. However, most overpayments are due to incorrect wage data provided by employees.

In Pennsylvania, overpaid people are given the choice of paying a lump sum or reducing benefits in the future.

“In Pennsylvania, as in any other state, mistakes do happen. There are a number of reasons for overpayment, including administrative errors, applicant errors and willful fraud on the part of the applicant. ”

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