CT lawmakers call on state to forgive unemployment overpayments
Two Democratic lawmakers are calling on the state to stop prosecuting thousands of people who have received unemployment benefits over the past year and who are now ordered to return all or part of this aid.
Senator Julie Kushner and Representative Robyn Porter, the co-chairs of the legislature’s Labor and Public Employees Committee, are due to hold a press conference on Thursday in an effort to push the state Department of Labor to grant a remission of debt to those who inadvertently received unemployment benefits to which they were not entitled.
Public pressure from lawmakers comes days after the CT Mirror published an article about the growing number of people facing alleged overpayments of unemployment benefits and the burden these debts can place on those in need. low income who no longer work for months.
Between April and June of this year, the state identified more than $ 8.6 million in overpayments, a significant increase from previous years. Some of these overpayments can be attributed to fraud. But a lot result from unintentional errors on the part of the applicant or the State the unemployment agency itself.
In other cases, people are made aware of an overpayment following an appeal from their former employer and the original decision to grant them benefits overturned.
Porter and Kushner expressed concern about the growing number of people facing potential repayments and the amount of some debts, which have reached tens of thousands of dollars.
State officials have the option of waiving reimbursement of the money in certain circumstances, as long as the jobless claimant is not directly accused of fraud. But both Kushner and Porter want to see this process expanded and accelerated.
“The onus of correcting these overpayments should not fall on beneficiaries who filed their claims in good faith,” Kushner said in a prepared statement. “It is incumbent on us as the state government to resolve this issue and resolve it quickly to reassure people. We are still in the midst of a pandemic and we need to step up. “
“It is inconceivable to me that there is even a demand for claimants to reimburse overpayments, especially following a pandemic that continues to persist,” Porter added. “I am very frustrated but I also hope that we will resolve this issue quickly for those who have legitimately made claims to the best of their ability.”
Labor ministry spokesperson Juliet Manalan declined to comment on lawmakers’ demands on Wednesday evening.
Spotting and correcting overpayments is a normal part of the state’s unemployment system. But the problem is much more complicated and consequent right now due to the pandemic and the economic downturn it caused last year.
The coronavirus pandemic created a litany of problems that led to the surge in overpayments this year: the unemployment system was overwhelmed, many applicants had never applied for unemployment benefits before and the Ministry of Labor has been asked to roll out several new federal unemployment programs.
Eric Brown, a Watertown-based labor lawyer, said he has represented people in the unemployment system for 28 years, but rarely dealt with overpayment issues until this year.
Several of the people Brown has advised and represented in recent months, he said, were facing overpayments of between $ 20,000 and $ 30,000. These people were approved for state unemployment benefits in 2020, he said, but their benefits were canceled about a year later after their employers appealed the initial decision to grant them unemployment benefits. aid.
Normally, the state would have reviewed these cases within a month or two and decided whether the claimants were actually eligible for state unemployment assistance.
But with the record number of unemployment claims filed during the pandemic, these disputed cases dragged on for months as claimants continued to receive unemployment benefits. Time passed and debts skyrocketed.
At the end of August, data provided to the federal government showed that there were nearly 12,000 unemployment cases stuck in the first phase of an appeal. And more than 4,000 of those appeals had been waiting for a decision for more than six months.
“It’s an issue that could follow these people for the rest of their working lives,” Brown said. “There must be a way to help them.
If people don’t voluntarily reimburse the money, the Department of Labor can seize people’s wages or enter their federal and state income tax returns.
Republican House Leader Vincent Candelora agrees overpayments are a problem. He told the CT Mirror on Wednesday that he shared the concerns of his fellow Democrats over “attempts to recover funds from households that desperately need it.”
But Candelora is also concerned about the long-term health of the state unemployment trust fund and the Connecticut businesses that pay taxes into that system.
This fund has taken a hard hit over the past year as the state has paid out billions of dollars to more than half a million job seekers. In fact, the situation was so dire last year that the state was forced to take out a loan of $ 725 million the federal government simply to keep the money going to the unemployed.
The point is that there is already a lot of financial pressure on the trust fund, and if the state chooses to forgo a large number of overpayments, that pressure will continue to grow – potentially millions of dollars.
Candelora isn’t opposed to forgiving many of the overpayments, but he wants to find a way to do so without raising taxes on Connecticut businesses, which are also still recovering from the pandemic.
One solution, he believes, would be to spend more federal relief money in the state unemployment trust fund. Connecticut leaders already decided earlier this year to use $ 155 million in federal aid to bolster the trust fund. But Candelora wants the Democratic-controlled legislature to spend even more money on this cause.
The state, Candelora said, still has about $ 280 million in the US bailout package, approved by Congress earlier this year. He believes the money would be better spent rehabilitating the unemployment system, which many economists have attributed to supporting state and national economies over the past year.
“We cannot blame the companies on this,” he said.