On Your Dime: Rhode Island waives unemployment overpayments

(WJAR) — Some states are trying to claw back unemployment overpayments made in the early days of the pandemic, but the NBC 10 I-Team learned Rhode Island is not one of them.

When the pandemic first started, states put new federal benefit programs in place under the CARES Act.

The purpose was to get benefits out as quickly as possible, but that rush resulted in thousands of errors made by state unemployment agencies.

As a result, many claimants received more money than they should have.

Massachusetts overpaid at least $2.7 billion in 719,000 unemployment claims, while Connecticut sent at least $8.6 million in inaccurate payments.

The Department of Labor and Training in Rhode Island has confirmed overpayments were made, but they’re still tabulating the total.

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“We’re going through all the data right now to get a sense of what that looks like and we are revising our overpayment procedures, as well,” DLT Director Matt Weldon said.

Massachusetts and Connecticut are two of the many states that have tried clawing back the overpayments, in some cases, asking residents to pay back thousands of dollars.

In Massachusetts, the legislature’s labor committee is now trying to stop the Department of Unemployment Assistance from collecting the overpaid unemployment benefits, arguing the overpayments were the fault of the agency, not the residents.

With similar issues unfolding across the country, the U.S. Department of Labor has issued new guidelines expanding the reasons states can waive overpayments, including if the agency was at fault or when eligibility changes prompted the issue.

Massachusetts lawmakers are now trying to determine whether the new guidelines can be used to request waivers for those who received overpayments.

While Rhode Island is still crunching the numbers, Weldon believes in most cases the claimant wasn’t at fault and therefore shouldn’t have to pay the money back.

“Under the federal programs, a lot of people were set up to get paid quickly, which is what was urged by Congress and the United States Department of labor, then the rules changed,” he said.

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Weldon says the overpayments were the result of a flood of claims, pressure to get payments out quickly and eligibility rules that changed five times during the pandemic, making it difficult for agencies to keep up.

He believes asking Rhode Islanders to pay the money back now would hurt working families trying to get on their feet again.

“Rhode Island is not asking people that received money in error or not their fault to pay it back,” says Weldon.

When asked whether he thinks taxpayers would be on board with the decision not to claw back the money, Weldon responded, “I don’t know and I think we have to look at it a little differently. It’s a pandemic, the federal government used the unemployment system as a vehicle to get stimulus money out of the economy. it was a good thing. We are trying to help people.”

Weldon also said the state will continue to go after fraudsters who scammed the system to get unemployment benefits through identity theft.

“If there was fraud committed, if there was abuse of the system, we are going to go after that money. We are going to try and get it back,” Weldon said. “But if it was an innocent mistake because of a rule change, then that money is long gone and asking somebody to come up with that money now it’s probably not the best way to handle this going forward.”

DLT should know the total amount of overpayments made in Rhode Island in the coming weeks.

Under the Labor Department’s new guidelines, states can waive overpayments if they fall under one of the following:

• An individual responded “no” to being able and available for work and the state issued payment for Pandemic Unemployment Assistance or Pandemic Emergency Unemployment Compensation without adjudicating the eligibility issue.
• An individual was eligible for payment and the state issued payment at a higher rate Weekly Benefit Amount under the Pandemic Unemployment Assistance or Pandemic Emergency Unemployment Compensation program.
• The individual responded “no” to being unemployed, partially unemployed, or unable or unavailable to work due to the approved coronavirus-related reasons, and the state paid Pandemic Unemployment Assistance. When asked to self-certify, the individual did not respond or confirmed that none of the approved coronavirus-related reasons applied and the state issued payment, resulting in overpayment for the week.
• The individual submitted required proof of earnings used to calculate Pandemic Unemployment Assistance Weekly Benefit Amount and the state incorrectly processed the calculation resulting in a higher weekly benefit amount under the PUA program.
• The individual submitted proof of self-employment earnings to establish eligibility for Mixed Earners Unemployment Compensation Program and the state incorrectly processed the information, resulting in overpayment.

The new guidance is optional for states to implement, which means they can still try to claw back the money if they choose to do so.