Some states overpaid coronavirus unemployment insurance. Now workers will have to repay the benefits


Hundreds of thousands of workers who received unemployment benefits through the Pandemic Unemployment Assistance program are on the hook to repay some of the money they’ve received since March.

States including North Carolina, North Dakota, Ohio, and Texas, among others, are asking for refunds of unemployment payments after determining that they overpaid some workers, local news outlets are reporting. 

The Texas Workforce Commission overpaid 185,000 people about $203 million between March 1 and Sept. 15, according to the Dallas Morning News, accounting for less than 1% of benefits paid out. Job Force North Dakota says just 0.48% of benefits were overpayments, KFYR-TV in Bismarck reported

In Ohio, the Department of Job and Family Services told the Wall Street Journal that up to Aug. 31, about 20% of PUA claimants — 108,000 people — had been overpaid.

Workers will likely have no idea that they were overpaid until they receive a notice from the state. State unemployment insurance equations are opaque, and because some workers waited weeks and even months to receive benefits, they might believe a large check simply included all of the back pay they were owed.

States can typically waive repayments of most unemployment insurance. But the PUA program, which was established to extend benefits to gig workers, contractors, and others who typically don’t qualify for unemployment insurance under the CARES Act, is administered differently than other types of UI, Michele Evermore, the senior policy analyst for the National Employment Law Project, tells CNBC Make It. Overpayments will need to be refunded.

“I think it was just an oversight because [the CARES Act] was written in a week or two,” Evermore says. Still, “people are going to wake up to a bill for six months of PUA at some point.”

Evermore says more states are going to start reviewing the claims they rushed out at the beginning of the pandemic, meaning more people will owe money in the coming weeks.

House Democrats introduced a new version of the HEROES Act in September which would allow states to waive the PUA overpayments. But with President Donald Trump announcing yesterday that stimulus talks are off, for now, it is not clear if workers who need to repay the benefit will see any relief any time soon.

There are other reasons workers may be on the hook to repay some of their benefits, though. In Pennsylvania, a computer error on the part of the state’s Department of Labor & Industry made “duplicate payments” to about 30,000 benefit recipients, Sarah DeSantis, the department’s press secretary, tells CNBC Make It in a statement. To make up the money, it cut checks in half for weeks. 

“We apologize to the claimants who received the extra payment and appreciate their understanding as we return their benefit to the accurate amount,” says DeSantis.

How much a worker will owe depends on how much they received in benefits. Some states, including North Carolina, are already docking unemployment benefit checks to make up for overpayments, workers tell CNBC Make It. 

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