February 17, 2022

State moves to ‘claw back’ unemployment money

BY Bera DunauDaily Hampshire Gazette

NORTHAMPTON — A number of residents in the region are receiving letters from the state seeking the return of unemployment benefit money paid to them during the COVID-19 pandemic — sometimes to the tune of tens of thousands of dollars.

“What people are receiving are ‘clawback’ letters,” said Rep. Lindsay Sabadosa, D-Northampton, who said she has been contacted by many constituents receiving these letters.

Sabadosa said that earlier in the pandemic the primary focus was to quickly get money into people’s hands. Now, the state Department of Unemployment Assistance is reviewing cases that were overlooked earlier in the pandemic. In some cases, that means people may have to provide additional documentation to prove their eligibility to receive the benefits. In other cases, people are being notified that they received benefits for which they didn’t qualify.

Sabadosa encourages people to reach out to her office, which can help file an appeal. “There have been some instances where we’ve been able to fix it quickly,” she said.

A January article in the Boston Globe said that at least $2.7 billion in benefits went to claimants who, the DUA later determined, received too much money or weren’t eligible for unemployment in the first place. This was based on data provided to Community Legal Aid, which also said that DUA issued overpayments on 719,000 jobless claims

Another organization that can help people with unemployment appeals is MassHire Franklin Hampshire Career Center. Maura Geary, the organization’s executive director, said staff at the center can guide people through the state’s website, as well offer other advice.

While MassHire helped process a lot more unemployment assistance in the first 18 months of the pandemic, Geary said there has been a recent spike in assistance prompted by overpayment letters and people requesting tax form 1099 for their unemployment benefits, which are taxable.

When it comes to overpayment letters, Geary said the most common problem is that the state sent out unemployment benefits during the pandemic without the same level of verification. In a number of cases, employers are now disputing the unemployment claims. Additionally, DUA may flag a person’s Social Security number showing that they worked when they were actually collecting benefits.

“Most of the time a decision hasn’t been made,” Geary said of the letters. “They have to investigate it.”

As for those who received Pandemic Unemployment Assistance, which was provided to the self-employed and others unable to qualify for traditional unemployment, Sabadosa said that Community Legal Aid can be of assistance.

Amy Dion, an attorney with Community Legal Aid, said the organization has been dealing with many clients who have received overpayment letters, with some clients being asked to repay tens of thousands of dollars.

Dion said that sometimes the ineligibility can be overturned, but in cases where it cannot, she advises filing for a waiver to forgive what is owed.

“They can fill it out online,” she said.

Dion said the DUA looks at several factors when evaluating waiver requests. Among those are whether a person gave up other benefits to get the unemployment, whether they have the ability to pay the money back, and whether someone having to repay would be against equity and good conscience. She also said that waivers are not available in cases of fraud.

Another element that Dion noted is that DUA can intercept tax refunds in overpayment cases.

“That money is a lifeline for so many of our clients,” she said.

However, she also noted that such interceptions only happen after a judgment is final.

Sabadosa said that people being asked to pay taxes on unemployment funds while also being asked to return the money should consult an accountant. The Volunteer Income Tax Assistance program, a free tax filing service, can also help.

Rep. Dan Carey, D-Easthampton, said that his office hasn’t seen an uptick in calls about unemployment. He did say, however, that his office has dealt with overpayment cases and that people should reach out to it.

“That’s what we’re here for,” he said.

As part of a bill recently signed by Gov. Charlie Baker, DUA will have to submit a report estimating how many people were overpaid in the pandemic, and approximately how much excess was paid out to them.

The bill allows the DUA to reconsider determinations or redeterminations of decisions resulting in overpayments one year after the initial decision, and requires the organization to launch a public awareness campaign to inform those who were overpaid that they have longer to appeal.

DUA did not return repeated calls for comment.

Bera Dunau can be reached at bdunau@gazettenet.com.