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Without Legislation, Worries Remain For Missourians Who Received Unemployment Overpayments

The Missouri Department of Labor could restart efforts to recoup millions of dollars it mistakenly overpaid people last year during the height of the pandemic.
File photo / Julie O'Donoghue
St. Louis Public Radio
The Missouri Department of Labor hit pause on efforts to recoup millions of dollars it mistakenly overpaid people last year during the height of the pandemic. But some worry that may soon change.

Missouri lawmakers wrapped up the legislative session without resolving an issue facing more than 46,000 residents who were mistakenly paid unemployment benefits last year.

A bill to forgive nearly $150 million of mostly federal benefits given out during the peak of the pandemic had bipartisan support in the House. But it hit a roadblock in the Senate.

Now lawmakers and lawyers representing people facing overpayments are worried the state will restart collection efforts after hitting pause for the last two months while the legislation played out.

Rep. Peter Merideth, D-St. Louis, said he expected the bill to pass without issue, and he blames conservatives senators for the holdup.

“They decided to jam it up with some amendments that would have actually gutted our unemployment system in Missouri for the long haul — dropping it all the way down to just eight weeks, which would make us by far the fewest weeks in the country,” he said.

Merideth said that made the bill impossible for Democrats to support. Without legislation, he worries his constituents and other Missourians will again face bills for thousands of dollars.

Yet Maura Browning, strategic communications director for the Department of Labor, said in an email the pause in pandemic-related non-fraud overpayments is “unchanged.”

“The department is examining the options available and will provide notice to affected claimants widely should the state begin collections processes,” she said.

About two months ago, director Anna Hui agreed to stop sending letters to people demanding they pay back unemployment benefits or face garnished wages.

That came after a contentious House hearing in which a bipartisan group of lawmakers grilled the director on a decision to place liens on people's properties after the department informally agreed to halt collection efforts earlier. Hui said the department withdrew the liens, and she apologized for the situation.

Gov. Mike Parson could authorize the department to forgive the overpayments. However, he’s previously said he thinks people should pay it back.

In an emailed response to a question about whether the governor would take action on the issue, spokeswoman Kelli Jones said, “All is still being evaluated.”

Merideth is urging the governor to forgive the overpayments. He pointed to the fact that $48 million was included in the recently passed budget to cover the cost of the state’s portion of unemployment overpayments. The federal government has previously advised states to forgive the money, most of which came from new, federal pandemic-related unemployment programs.

“As far as I’m concerned, the governor should go through with forgiving,” Merideth said. “I am very concerned he is not going to because he hasn’t seemed to want to, and it seems like he’s looking for any excuse he can not to.”

Over the past few months, Jim Guest, director of the volunteer lawyers program at the nonprofit Legal Services of Eastern Missouri, has offered pro bono services to help many low-income people appeal their overpayment determinations from the state.

He said he hasn’t been getting a lot of calls lately about this. But since the legislation failed, he’s worried clients will soon start receiving letters again.

“This narrative that clients are sitting on their couches collecting all these benefits and living the fat life just is not accurate,” he said. “People have used these benefits to survive.”

Follow Corinne on Twitter: @corinnesusan

Corinne is the economic development reporter at St. Louis Public Radio.