Overpayment Agency Error $13K

[ip3133]

What is the name of your state (only U.S. law)? Virginia

I went on unemployment after being laid off in Sept 2009. I just received a notice of deputy's determination that I was overpaid in the amount of $14,000 from Sept 2010 to June 2011 due to agency error. They had approved a 2nd claim after I had exhausted all benefits on the 1st claim. They said that I was double dipping, but this was NOT intentional, and was an agency error that was not caught until 9 months later. I have pretty much already spent all that money trying to keep my head afloat and am now getting by through the help of my parents. The job market is horrendous in the area I live currently. The person I spoke with at the unemployment agency advised me that my only real option was to file an appeal if anything to buy me time. What do I have to write in the appeal? Do I have to hire a lawyer for this because, I'm afraid I won't sound professional enough.

"The appeal must be in writing and should set forth the grounds upon which the appeal is sought."

 

[tranquility]

Since you are not going to win on your appeal, what difference does it make what you put? You're only trying to delay the inevitable.

 

[commentator]

Yes, quickly, while you are still within the appeal window, file the appeal. DO NOT PROCRASTINATE about this. If you do not get the appeal in within the window, usually 15 days, you have no appeal, regardless of the circumstances. And this is a circumstance in which the department has actually admitted that the overpayment is their own fault. And by all means, do the appeal. It is worth it. If you had been committing fraud, knowingly falsifying your unemployment claim, there wouldn't be much appeal. But under these circumstances, definitely file it. Get on very close terms with your overpayment unit, in addition to filing the appeal. They should be quite willing to work with you.

Don't worry at all about how "professional" your appeal sounds. All unemployment insurance situations are supposed to be user friendly to the point that an attorney is not required to move you through the system if you are not very dysfunctional as in totally illiterate or something similar. Much more important that you submit something timely.

What you will need to say in the appeal letter that you send back to them is something like, "I wish to appeal the overpayment decision of xx/xx/xxxx. This overpayment, as stated in the decision, was due to agency error, not error on my part. I contacted the unemployment system when my original claim expired, as I had been instructed to do. At this time, I was signed up for, and approved for an additional claim. I filed for weeks as instructed, and was paid. I had no idea I was not supposed to be eligible for this additional claim or was receiving more money than I was entitled to, as I had been told by the unemployment system to continue making my weekly certifications, and I did so and received money for each week. I met all the requirements to receive benefits during this period, including making a job search and registering for work and reporting to the system each time I was instructed to do so."

If you are totally absolved from the overpayment, that would be peachy. I cannot predict what will happen, as I do not know all the variables.
But what will more likely happen is that you will have an overpayment which will not be forcefully collected, but will stay on your unemployment insurance account with this state (and any other state) for the rest of your working life. In other words, you will probably not be forced to pay the money back right now. You will not have your wages garnished, no forced collection process would be carried out against you. But if you ever sign up for unemployment again, you'll be charged for the overpayment, you won't be able to draw any money because the weeks you certify for will be taken by the system to pay back this overpayment.

This is not, incidentally, taxpayer money or welfare benefits we are talking about here. This is money from the unemployment insurance pool that is kept by each state to cover unemployment insurance payments. With the huge workloads of the unemployment system during the last few years, there have been many people hired to work for them who did not know exactly how to do what they were supposed to be doing. In the case of this type of double dip overpayment, the whole payment system may have misfunctioned somehow. In any case, you were not the one who would be supposed to have very superior knowledge of how the system should work. After 30 years of working with the program, I would quickly understand that I was being paid more weeks than I was entitled to. But since you were told to keep filing, and then you kept receiving money when you did file, so it appears this certainly wasn't deliberate fraud on your part.

In either case, as you say, you are still unemployed, and your financial situation is still pretty desperate. You need to request a waiver of repayment on this overpayment. Ask the unemployment fraud unit investigators (their department number will be on the notice of overpayment, Do not deal with only a basic person who answers the telephone at the unemployment insurance office, deal specifically with the fraud and overpayment unit when discussing your overpayment situation) about a waiver immediately. They understand that in the first place, this overpayment was not due to fraud, and in the second place, since you are still unemployed, you pretty much lack the ability to come up with the money to pay them back right now. Getting a waiver will require you to submit very detailed information about your finances, but when they know that you cannot repay the money, they will deal with it taking your finances into consideration.

 

[tranquility]

Um...that may be the way many states would handle this. For Virginia, see:
http://www.vec.virginia.gov/vecportal/unins/pdf/effectiveuiadjudication.pdf

Here, I am uncertain as to what the OP is appealing. The decision was correct and the OP only wants to put things out a little farther. The state determined there was an overpayment, the amount and that it was their fault. Was the fact there was an overpayment wrong? Was the amount wrong? How about fault?

I don't think the OP has any realistic way of appealing this to his benefit.

(From the overpayment section of the above. [emphasis mine])

I. Overpayment

A. Statement of law

Section 60.2-633 provides as follows:

Receiving benefits to which not entitled. -- Any person who has
received any sum as benefits under this title to which he was not
entitled shall be liable to repay such sum to the Commission. In
the event the claimant does not refund the overpayment, the
Commission shall deduct from any future benefits such sum payable
to him under this title unless the overpayment occurred due to
administrative error, in which case the Commission shall deduct
only fifty percent of the payable amount for any future week of
benefits claimed, rounded down to the next lowest dollar until the
overpayment is satisfied. Administrative error shall not include
decisions reversed in the appeals process. In addition, the
overpayment may be collectible without interest by civil action in
the name of the Commission. The Commission may, for good cause,
determine as uncollectible and purge from its records any benefit
overpayment which remains unpaid after the expiration of seven
years from the date such overpayment was determined, or
immediately upon the death of such person or upon his discharge in
bankruptcy occurring subsequently to the determination of
overpayment. Any existing overpayment balance not equal to an
even dollar amount shall be rounded to the next lowest even dollar
amount.

With a specific claim of generosity:

3. Administrative Error

Prior to 1985, outstanding overpayment balances were offset
against subsequent benefits payable on a dollar-for-dollar basis
until the overpayment was satisfied. This meant that a claimant
with an old overpayment of a substantial amount might never
receive any benefits on a new claim for many weeks. In order to
ease the burden of individuals in such a situation, where the
overpayment had been caused by administrative error, this section
was amended to provide for a 50 percent offset in such cases.
This way a claimant can receive some benefits even though the
overpayment is outstanding. Note, however, that there is no
forgiveness of half the overpayment where administrative error is
involved; rather, the offset will continue at 50 percent of the
subsequent weekly benefit amount until the overpayment is fully
satisfied.

 

[ip3133]

I did go ahead and file an appeal. Thanks commentator for the prompt and helpful response.

The overpayment dept agent I spoke with informed me that once the appeal is filed the overpayment would be put on hold. Do you think I would still need a repayment waiver?

 

[tranquility]

If you looked at the link or the quotes provided rather than see what you wanted to see, you would have found the answer.

The Commission may, for good cause,
determine as uncollectible and purge from its records any benefit
overpayment which remains unpaid after the expiration of seven
years from the date such overpayment was determined, or
immediately upon the death of such person or upon his discharge in
bankruptcy occurring subsequently to the determination of
overpayment.

There is no waiver. (Note the terms "any" and "shall" in the law.)

Any person who has
received any sum as benefits under this title to which he was not
entitled shall be liable to repay such sum to the Commission.

There has been a bill which has been introduced for the last two years, which has been filed with a committee where it has died each year, giving the department the right to waive what it is due. But, it is not the law. The proposal?

Waiver of overpayment of unemployment benefits due to administrative error. Requires the Virginia Employment Commission (VEC) to waive an individual's obligation to repay overpayments of unemployment compensation benefits if (i) the individual requests a waiver, (ii) the overpayment occurred solely because of an administrative error by the VEC, (iii) repayment was not demanded within the six months following the date of the overpayment, and (iv) requiring the individual to repay the overpayment would be inequitable. If the four criteria for a mandatory waiver are not satisfied, the VEC is provided the option of waiving all or part of an individual's obligation to repay overpayments of unemployment compensation benefits if the overpayment occurred solely or partially due to an administrative error by the VEC (and in no part due to the individual's false representation or failure to disclose a material fact) and the VEC determines that recovery of all or part of the overpayment would be inequitable. In determining whether requiring the individual to repay an overpayment would be inequitable, the VEC shall consider whether repayment would cause economic hardship to the individual.

That would fit nicely. It is the fiscal implications listed in the bill which is a problem:

Currently, the VEC is required to attempt collection on all benefit overpayments, regardless
of the reason for the overpayment. Payment is to be collected by way of a dollar-for-dollar
offset against any future benefit entitlements if the claimant who was overpaid is, or later
becomes, eligible for future benefits. In a situation where an overpayment is due to an
administrative error by the VEC, the statute limits the amount of the offset to 50 percent of
the claimant’s weekly benefit amount.

Over time, by waiving administrative error overpayments that are currently accounted for,
could reduce the balance in the Unemployment Insurance Trust Fund and ultimately
contribute to higher employer taxes to meet required fund balances.

Be sure to lobby your state representative! There still may be time to pass it before the year is up.

 

[commentator]

Very true, some states have no waivers. Dealing with overpayments will make you wish that there were, as some people become overpaid through absolutely no fault of their own, and without the slightest potential to repay the money.Then also, there are people you wish you could prosecute and lock up and throw away the key! Your source of information on this issue is always going to be the overpayment unit in your state. They are your final authority on this situation. Even without a waiver, I believe that you have a very good chance of having this stay on your record without being aggressively collected immediately. Good luck to you, let us know how it plays out.

 

[tranquility]

I completely agree with what commentator wrote. It should be that way. Also, I believe at least a large minority of the states treat the overpayment that way.

(I note that while the commission CAN use other, civil, collections techniques, there is no SHALL there and they can certainly wait for future payments to collect.)