February 28, 2022

Baker administration seeks approval to waive all federal unemployment overpayments

BY Larry EdelmanThe Boston Globe

It’s taken far too long, but Governor Charlie Baker’s folks are now serious about doing right by hundreds of thousands of Massachusetts workers trapped in a bureaucratic nightmare over more than $2 billion in errant unemployment checks.

The administration sent a letter this week seeking US Labor Department approval to drop its efforts to recover federal jobless benefits from workers who were later deemed ineligible or received more money than they should have.

The request from Rosalin Acosta, secretary of the Executive Office of Labor and Workforce Development, covers overpayments on federal jobless claims — primarily from the Pandemic Unemployment Assistance program, or PUA — that didn’t result from fraud or intentional mistakes by recipients.

While the Massachusetts Department of Unemployment Assistance administered the pandemic programs, the money was provided by Congress. Overpayments on state-funded unemployment claims would not be affected.

Acosta is asking that the DUA be allowed to grant blanket waivers that would eliminate the need to review each case individually.
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“Without a blanket waiver option . . . the agency must evaluate on a case-by-case basis potentially more than 300,000 waiver applications,” Acosta said in a letter to our very own Marty Walsh, who stepped down as Boston’s mayor to take charge of the Labor Department. “That process is laborious for the agency and can be frustrating for the claimant.”

The Globe has reported that overpayment notifications soared after Congress passed new jobless relief legislation in December 2020. As part of the bill, the DUA was required to obtain documented proof of prior employment from PUA recipients. Initially those people were able to self-certify their eligibility. PUA was created for self-employed and gig workers who aren’t covered by state unemployment.

The federal rule change — and the attempts by an overwhelmed DUA to implement it while following strict Labor Department guidelines — forced recipients of overpayments to devote many stressful weeks or months trying to sort out the situation. DUA notices were confusing, its service agents were impossible to reach, and many people had long ago spent the money.

“This is simply the right thing to do,” said Abby Heim of Rowley, who had been told by the DUA that she owes $80,000.
By a DUA tally earlier this year, there were about 383,000 people with potential overpayments of $2.6 billion, the large majority of that from PUA and other federal programs. Total overpayments, including those already resolved, likely far exceed that amount.

In her letter, Acosta said Massachusetts earlier this month requested blanket waiver approval for overpayment notices issued in cases where recipients could not provide adequate substantiation of past employment, a situation that triggered repayment demands on more than $1 billion in claims.

The request came after the Labor Department gave state unemployment agencies more flexibility to waive overpayments caused by their own errors. It also said it was open to proposals from states on other conditions for permitting blanket waivers.

The DUA now wants to grant blanket waivers on all nonfraudulent overpayment for PUA and other federal programs rolled out during the pandemic. Federal rules permit waivers only for people who weren’t at fault for the overpayment and for whom being forced to repay the money would go against what is known as “equity and good conscience.”

The move puts the fate of overpayment recipients in the hands of Walsh and the Labor Department, which said it was reviewing Acosta’s letter but declined to comment further.

Acosta didn’t say what would happen to people who already repaid the state or are in the process of appealing or seeking an individual waiver. A DUA spokeswoman decline to comment.

Hannah Tanabe, an attorney at Greater Boston Legal Services, applauded the DUA’s request.

“Workers who have been able to navigate the technical and confusing waiver application are waiting on average four to five months for their waivers to be processed, but I have clients who have been waiting for nearly a year,“ she said. “This would provide very welcomed relief.”

But let’s not forget that there is another group of people facing more than $500 million in overpayments on state jobless benefits. Baker’s team should help these folks, too.

“Those claimants are no more at fault and are as in need of state intervention,” said Rory MacAneney, an attorney at Community Legal Aid. “It is within the state’s power to provide that relief today.”
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Larry Edelman can be reached at larry.edelman@globe.com. Follow him on Twitter @GlobeNewsEd.