Should NC forgive people who mistakenly got extra unemployment benefits?
As the coronavirus pandemic ravaged the economy in 2020, nearly one in every three workers in North Carolina filed for unemployment.
All in all, state and federal unemployment programs doled out more than $8 billion to out-of-work North Carolinians over the course of last year. But nearly $70 million of that turned out to be in error, state officials now say. Some was due to identity theft, some to fraud and some to honest mistakes.
On Tuesday, state lawmakers urged Pryor Gibson, the head of the state’s Division of Employment Security, to grant more waivers for people who were overpaid by mistake. Go after the fraudsters, they said, but don’t make people pay back money just because something went wrong on the paperwork.
“When people are already struggling and have been waiting so long — that weighs on all of our hearts that through no fault of theirs, they received that check” but might now have to pay money back, said Sen. Jim Perry, a Lenoir County Republican.
“Now there’s another round of despair,” he said.
Henderson County Republican Sen. Chuck Edwards said it’s especially important for the government to be cautious about going after people for over-payments, since it was also the government that caused many of them to be out of work in the first place — and then often made them wait on their benefits.
The News & Observer reported in 2020 that despite the state’s goal of a 14-day turnaround, some people who qualified for unemployment ended up waiting two months.
“All of our offices have been receiving calls from folks that may have been asked to stay home from their job by the government, and give up their job and their livelihood in return for unemployment that they had to wait on for an extended period of time” Edwards said. “And then at some point they went to their mailbox. They found a check that they had been waiting on. They went and cashed that check, bought Christmas presents and paid their bills.”
For them to now be asked to repay that money, he said, is concerning as long as there wasn’t any fraud involved.
“I and the others here certainly sympathize with folks that have found themselves in that position,” Edwards said. He’s the co-chair of the Joint Legislative Oversight Committee on Unemployment Insurance, which met with Gibson Tuesday.
Collecting on overpayments
Gibson said the state has already collected on $20 million in overpayments, although he didn’t have data on how much of that was from money owed from previous years versus from the $70 million in 2020.
He also told the lawmakers that very few of the overpayments the state made were due to mistakes made by DES staffers. Almost all of it was due to errors made by the people filing the claims, he said, although it’s not always clear whether those errors were intentional.
For instance, Gibson said, a common reason for overpayment was that someone on unemployment got a new job but didn’t report it to the unemployment office, so their benefit checks kept coming. Some people went only a few days without reporting while others went weeks, Gibson said.
So while he said the state does plan to go after people who committed fraud — by setting up payment plans to get the money back, taking their income tax refunds or potentially going to court — he also acknowledged that people could have made honest mistakes simply because they’ve never been on unemployment before.
“Thankfully North Carolina is blessed to have so many inexperienced folks in the unemployment insurance system,” he said.
Fraud investigations vs waivers
State officials won’t necessarily offer on their own to waive people’s overpayments, but people can request it.
A top DES staffer who attended the meeting with Gibson, Antwon Keith, said there are multiple levels of appeals that people can go through if they want to fight the state’s claim that they were overpaid, and most people don’t ask for a waiver until their appeals are finished.
And since the appeals process is backlogged like many other pieces of the unemployment system right now, many people who have been asked to pay money back likely still have a chance to ask for a waiver.
Gibson said the office has been hiring more attorneys to deal with appeals, and that they’re also increasingly turning their attention to just one of the nine state and federal unemployment programs: The Pandemic Unemployment Assistance program, or PUA.
PUA was the program, funded by the federal government, that allowed people like gig workers, independent contractors and other self-employed people to get unemployment benefits they normally wouldn’t be eligible for. Because people were reporting their own wages, and the process was new and rushed, Gibson said, it’s where many states including North Carolina identified the most fraud.
“It is a program that, unfortunately, people in stress might answer incompletely or not completely truthfully,” Gibson said. “So we’re having to pay close attention to PUA. It’s a program brand new to us, brand new to everybody. But it’s a program we think is fraught with fraud.”
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This story was originally published January 27, 2021 at 5:15 AM with the headline "Should NC forgive people who mistakenly got extra unemployment benefits?."
