U.S. Department of Labor updates guidance for states to waive recovery of overpayments for unemployment insurance benefits

WASHINGTON, D.C. – During the height of the pandemic, records were broken as millions of Americans filed claims for unemployment benefits. As demand soared, the U.S. Department of Labor provided instructions to states to administer payments under several programs authorized by the Coronavirus Aid, Relief, and Economic Security Act. As guidance evolved, states paid benefits – in some cases – to individuals who were not entitled to receive them, although the individuals were not at fault.

Today(Feb. 7), the department issued an Unemployment Insurance Program Letter to states to address overpayments under the CARES Act’s Unemployment Compensation Programs when the claimant is not at fault. The updated Unemployment Insurance Program Letter augments guidance the department issued on May 5, 2021.

In recognition of the enormity of the challenge the pandemic placed on claimants and State Workforce Agencies, the department’s Employment and Training Administration updated its waiver guidance to approve five new scenarios under which states may apply blanket waiver of recovery of overpayments:

• 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.

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