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Lawmakers Want to Waive $8.6M in Unemployment Overpayments

Thousands of Connecticut residents were overpaid in unemployment insurance, meaning they now owe millions. But some lawmakers want the state to waive repayment and reimburse the unemployment fund.

(TNS) — Conn. Speaker Matt Ritter said Wednesday he and fellow House Democrats may take up legislation authorizing the state Department of Labor to waive unemployment insurance overpayments being billed to workers who lost their jobs in the pandemic.

The state should waive the overpayments, which he said could require the state to pay the Unemployment Insurance Trust Fund between $6 million and $10 million.

“We have the resources,” Ritter said. “I know the caucus cares about it. This was not done intentionally.”

Sen. Julie Kushner, D- Danbury, and Rep. Robyn Porter, D- New Haven, co-chairs of the legislature’s labor committee, have scheduled a news conference Thursday calling on the Department of Labor to “urgently find a solution” to overpayments.

Juliet Manalan, spokeswoman for the Department of Labor, said that in some cases overpayments not related to fraud resulted from delays by employers responding to notices from the agency. Employers may dispute a claim, but benefits may already have been paid, prompting the Department of Labor to seek repayment.

In other cases, an applicant makes an error while filing and in some cases the agency is responsible for a mistake, she said.

“Nonfraud overpayments are unintentional mistakes made during what is a complex process and the agency makes every effort to work with claimants and employers to help them fix the issue,” Manalan said in an email.

The CT Mirror reported that state officials are reviewing and auditing many unemployment claims over the past year and have begun to issue thousands of letters instructing those who received unemployment insurance to repay part or all of the benefits they received during the pandemic.

One recipient reported being dunned for $31,110. Manalan said the Department of Labor will not discuss individual circumstances.

Ritter said the overpayments were in many cases due to “some clerical paperwork issues” and that the state should not be “piling on” unemployment insurance beneficiaries “considering what they’ve gone through.”

“It was a complicated time and everybody was doing the best they could,” he said. “This was not done intentionally.”

The unemployment trust fund is financed by taxes on Connecticut businesses, with interest in years before the pandemic paid back in a special assessment on businesses for the time it takes to repay a loan. The U.S. Department of Labor requires state labor agencies to identify and recover overpayments.

During the pandemic, unemployment applications skyrocketed to 400,000 weekly filings, up from 40,000. The Department of Labor currently has about 115,000 weekly filings.

Connecticut has a waiver system in place, Manalan said. They are most often granted on economic grounds when demanding repayment could wreck a family’s financial well-being or result in other extreme consequences.

State law authorizes the labor commissioner and adjudicators to waive an overpayment for economic hardship or if someone is unable to work due to a disability. An independent Appeals Division also may grant a waiver for portions of an overpayment.

Eric Gjede, a lobbyist for the Connecticut Business & Industry Association, said the Department of Labor’s antiquated computer system is partly to blame for overpayments. State officials acknowledged early in the pandemic that its computer system dating to the 1980s or earlier was overwhelmed.

“It’s pretty inexcusable we had a 40-year old system at DOL,” he said.

Gjede said state officials in many cases did not process claims for weeks, with businesses in the dark about the status of employee claims.

“There’s plenty of blame to go around on this,” he said.

©2021 Hartford Courant. Distributed by Tribune Content Agency, LLC.

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