Michigan workers who received unemployment insurance benefits during the COVID-19 pandemic may owe that money back.
Michigan’s Unemployment Insurance Agency said on Sept. 8 that it was going to resume collections in the cases of about 350,000 claimants who filed for jobless benefits as far back as March 2020 who the agency had determined had been overpaid, to the tune of about $2.7 billion.
If you owe, this should not be the first time you’re hearing about it. Claimants who received jobless benefits in the pandemic who may have to pay benefits back, said Jason Palmer, the director of Michigan’s UIA, would have been notified years ago that they were overpaid benefits.
So what do you do if you are in this situation?
Below is a list of questions and answers that might help you understand what your case status is and what to do next.
The UIA said it paused collection in these cases because of a court order from a class-action lawsuit against the agency. The UIA was ordered, via a preliminary injunction, to not request or accept payments on the debt while the lawsuit played out.
Impacted claimants would not have received any collection attempts, such as a monthly bill or having their wages garnished, Palmer said.
That class-action, which was filed by similar claimants who received unemployment insurance benefits during the pandemic and then were told they had to pay the money back to the state, and who in certain cases, had already had their wages garnished or tax returns seized, was settled for $55 million in May.
As part of the order from the state judge approving the settlement, the preliminary injunction that prevented the UIA from engaging in collection efforts was dissolved. The pause in collections was allowed to be lifted on Sept. 12, the UIA said.
Impacted claimants were to receive a reminder by Sept. 9 in their online unemployment insurance benefits accounts (the Michigan Web Account Manager, or MiWAM) that they were overpaid benefits, the UIA said.
In addition, a follow-up collection notice, known as Form 1088, was expected to be sent from the agency as soon as Sept. 12, which includes the amount owed and information about applying for a financial hardship waiver, the agency said.
Palmer said a key principle of unemployment insurance law is to pay claimants, but then as the agency gets more information about the claimant and work status, their eligibility for benefits can change.
He gave the example of a claimant who, when certifying for benefits, stated that they didn’t work and had no earnings. When the agency reviewed the claim, the agency received wage record data from their employers, finding the person did have earnings during that time frame, and so they would not qualify for unemployment.
More on why the UIA collecting benefits: Michigan wants $2.7B from workers it says were overpaid COVID-19 unemployment benefits
Palmer said the UIA is legally obligated under the Michigan Employment Security Act to seek repayment of overpayments and return the money to the Unemployment Insurance Trust Fund.
The U.S. Department of Labor also requires Michigan and other states to recover overpayments, a Michigan UIA spokesperson said in an email. Palmer said the federal unemployment benefits collected, such as from the Pandemic Unemployment Assistance program or extra money claimants received in the pandemic, will be returned to the federal government.
Under the May $55 million lawsuit settlement agreement, the UIA is prevented from collecting overpayments until protest or appeal rights have been exhausted and claimants are given a chance to request a waiver based on financial hardship, administrative or clerical error or a wage reporting error.
Protests must be received within 30 days of the mail date of the determination notice, the UIA said, meaning for pandemic-era claimants, that window has passed.
However, the UIA said workers have time to request a financial hardship waiver, and can do so by going to the “UI Claim” screen in their online unemployment insurance accounts under the “Claimant Services” tab.
Overpayments will not be waived on claims where there have been findings of fraud or intentional misrepresentation, the UIA said.
The first payments for affected workers are due on Sept. 29.
Claimants can submit payments through their online unemployment benefits account (MiWAM) or they can send checks or money orders with the “Form 1088 Payment Voucher” to:
Unemployment Insurance Agency-Restitution, Dept. No. 771760, P.O. Box 77000, Detroit, MI 48277-1760
The UIA said to be sure to write the claim or account number on the check or money order if the payment voucher isn’t included.
The UIA said it will not accept cash, and missed payments could result in penalties and interest being added to what is owed, garnishment of wages, tax intercepts or recoupments from future benefit payments.
The UIA has answers to a list of frequently asked questions about the overpayments, which can be found near the top of the UIA’s website at Michigan.gov/UIA.
Questions concerning balances should be directed to the Benefit Overpayment Collections Unit by calling 866-500-0017, pressing option No. 1, then No. 4 and then No. 1, the agency said.
Contact Adrienne Roberts: amroberts@freepress.com
This article originally appeared on Detroit Free Press: How to see if you have to repay unemployment benefits
