States accidentally overpaid thousands of workers over the spring and summer during a rush to get relief to unemployed and idled Americans. Now they want the money back, the Wall Street Journal reported. Even though the funds have long since been spent and many of those workers continue to struggle with the coronavirus pandemic’s economic fallout, people across multiple states are being asked to repay thousands of dollars or are having their current benefits cut to make up the difference. Individuals themselves often have no idea they are being overpaid, in part because formulas for unemployment checks can be hard to decipher. Many also waited weeks to start receiving benefits, and say they believed that large checks were simply the back payments they were owed because of delays. For many people, the repayment obligations hinge on a fine-print detail in the March CARES Act, which authorized the new programs. States can waive recovery of overpayments for most unemployment insurance when there is no fraud involved, but the Pandemic Unemployment Assistance program follows a different set of rules. It is administered as a form of disaster relief, and the statute that guides it blocks states from forgiving the debts. Adding to the complexity, the PUA program gave new categories of workers—including gig workers and the self-employed—access to unemployment checks. 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.
