Some Unemployment Benefit Recipients Have to Pay Money Back
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What is the issue with unemployment benefits being paid during the pandemic?
Here's your money briefing for Monday, October 5th. I'm J.R. Whalen for The Wall Street Journal. Millions of Americans have relied on state and federal unemployment benefits to help them get by during the pandemic. But many of them are now facing the unimaginable, having to pay a big chunk of it back.
They were trying to start up these programs so quickly in an effort to get relief out to the people who needed it that in some instances they may have misinterpreted the federal guidance or they had people answering phones from people who were trying to claim benefits who didn't know the answers to questions.
Our reporter Lauren Weber will tell us if people who receive too much money and are now being asked to pay it back have any recourse. That's after the break.
The economy has recovered more than half of the 22 million jobs that were lost at the start of the pandemic. That leaves millions still relying on unemployment benefits to pay the bills.
Who is affected by states demanding repayment of unemployment overpayments?
But calculation errors by some states means that some people have been getting more than they should have and now may have to pay it back. Our reporter Lauren Weber covers workplace issues for The Wall Street Journal, and she joins me now to discuss. Lauren, thanks for being here.
Thanks for having me.
So, Lauren, this seems really cruel. I mean, in a lot of cases, these benefits were just barely allowing people to get by.
Yes. And for many people, they were shocked to find out that they were being overpaid in the first place. And for many, their benefits are being cut now. And this was money they were using just to survive. For those who had overpaid, you know, that money is long since spent on things like rent and food.
How did calculation errors cause some recipients to be overpaid?
So they don't have that extra cash to be able to repay that debt.
Now, didn't some recipients notice early on that the payments they were getting were higher than they should have been?
Yes, I spoke to one woman in Colorado who got her first benefit statement and thought it was larger than she had been expecting. So she called the agency that operates unemployment insurance benefits, and she said she called about 58 times to try to finally get through to someone. She was so concerned that she was doing something wrong or a mistake had been made. She finally did get through to someone who basically said, oh, don't worry about it.
Why are self-employed and gig workers especially vulnerable to miscalculated benefits?
This looks correct to me. I don't think there's a problem here. So eventually she figured, OK, I guess this is right and went about her business. And then a few months later, got a notice saying that she had been overpaid by about $13,000 and owed that money back to the state.
Wow. For somebody struggling financially, that is a lot of money.
Yeah, for a lot of these people, they're self-employed.
Can states legally waive overpayment collection and what limits exist?
And so some of them have a little bit of money coming in if perhaps, you know, they've been able to restart their business a bit. But, you know, none of these people are back to where they were prior to the pandemic. This was somebody who's a health coach. She does her coaching face to face mostly. You know, it's very hard to build your business back up to where it was when things were going well.
So who's at fault here? How could the numbers be so far off?
Well, this is one of the things that's very difficult to figure out. In many cases, from what I can tell, it's the state agencies that operate the unemployment system that have made mistakes. And part of it is very understandable.
What practical challenges do recipients face when disputing overpayment notices?
And experts I spoke with said, You know, we understand why mistakes got made. They were trying to start up these programs so quickly in an effort to get relief out to the people who needed it that in some instances they may have misinterpreted the federal guidance or they had people on the phones, you know, answering phones from people who were trying to claim benefits, who didn't know the answers to questions. So it's not surprising that a lot of mistakes were made. The hard part is that now people are being asked to repay for those mistakes. And again, they don't have the money to do that.
Could new legislation or improved systems prevent future overpayments?
Was it some sort of a programming issue with the computers?
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Chapters
7 chapters
1
What is the issue with unemployment benefits being paid during the pandemic?
0:05–1:03
2
Who is affected by states demanding repayment of unemployment overpayments?
1:03–1:42
3
How did calculation errors cause some recipients to be overpaid?
1:42–2:17
4
Why are self-employed and gig workers especially vulnerable to miscalculated benefits?
2:17–2:39
5
Can states legally waive overpayment collection and what limits exist?
2:39–3:17
6
What practical challenges do recipients face when disputing overpayment notices?
3:17–3:52
7
Could new legislation or improved systems prevent future overpayments?
3:52–8:49
Speakers
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