Though said funds have long been spent by most of the cash-strapped individuals who received them, state governments are demanding that excess unemployment aid they erroneously distributed somehow be paid back, or else.
In some cases, states are having to cut current benefits to unemployment recipients in order to make up for the losses. In others, those who received overpayments are simply being told that they need to come up with the missing cash as soon as possible.
Strangely, many of those who were overpaid had no idea that the amounts printed on the checks were wrong. Because it took quite a while for many of them to even start receiving their benefits, the assumption was that the extra dollar amounts were back payments to make up for the government's failure to get the checks out more promptly.
In one case reported by The Wall Street Journal, a woman named Autumn Stull, who owns a maternity and children's consignment store in Golden, Colo., was told that she owed the state of Colorado nearly $9,000 in overpayments that she received from the state while her business was closed.
Stull had taken advantage of the Pandemic Unemployment Assistance Program, which in Colorado allows for self-employed individuals to collect aid. Several weeks after reopening her business in May, Stull received a notice about the overpayments and was horrified.
"Your heart skips a beat. Your stomach sinks. Your eyes get teary," she recalls about her reaction upon receiving the notice. "The money is gone. I used it. We've been through enough."
House Democrats present updated Heroes Act to waive overpayment debt
As it turns out, the state had actually made a mistake in calculating Stull's business income combined with her personal income, and the issue was corrected. Her benefits were decreased, but at least the overpayment part was annulled.
Cher Haavind, deputy executive director of the Colorado Department of Labor and Employment, naturally blamed Stull and others like her for the error, claiming that they incorrectly reported their earnings. However, Haavind did not respond to requests from the Journal for further clarification about the alleged state errors.
As explained by the Journal, a fine-print detail in the March Cares Act is the reason why states are now demanding repayment of excess unemployment benefits. While states can typically waive recovery of overpayments for unemployment insurance when no fraud is involved, the Pandemic Unemployment Assistance program contains a statute that actually blocks states from forgiving such debts.
"Adding to the complexity, the PUA program gave new categories of workers – including gig workers and the self-employed – access to unemployment checks," adds Lauren Weber, writing for the Journal.
"But state unemployment systems were designed to calculate benefits based on traditional jobs, employer records, W-2 tax documents and verifying income with pay stubs. Re-engineering the systems to account for far more complicated self-employment income was bound to create problems, experts say."
House Democrats in their latest version of the Heroes Act are attempting to address this problem by allowing states to waive PUA overpayments in cases where workers are unable to repay them "without severe hardship." If passed, this provision would apply to both past and future overpayments.
"The Labor Department measures states' performance in administering unemployment-insurance benefits, tracking metrics such as overpayment and the time it takes to process applications," Weber further notes.
"So there is an incentive for states to recover money they erroneously paid out, says Michele Evermore, a senior policy analyst at the National Employment Law Project."
For more related news about the plandemic, be sure to check out Pandemic.news.
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