Bills To Forgive Unemployment Overpayments Get Bipartisan Support
Updated Feb. 10 with details from House Government Oversight Committee hearing:
Six Missouri state representatives are working to pass legislation to forgive some or all of the unemployment overpayments that the Missouri Department of Labor is asking thousands to pay back.
Five bills currently moving through committee would forgive the federal portion of that funding, which is about 80% of all the benefits. A noninterest payment plan is being offered by the department.
Rep. Ian Mackey, D-St. Louis, wants to see the state portion also forgiven, since it was the department’s error.
“Why wouldn’t we want to say to any unemployed person who did not commit fraud, who was inadvertently overpaid, to say: ‘We got it. We messed up. It’s on us,’” Mackey said.
Mackey wants to see the state use general revenue funds to pay back the money.
Rep. Peter Merideth, D-St. Louis, suggested the state utilize federal coronavirus relief funds to forgive the state’s portion of the overpayments. He earned some Republican support with that idea. None of the bills has advanced yet out of committee for consideration by the full House.
Updated Feb. 4 with comments from Missouri Gov. Mike Parson:
Gov. Mike Parson reiterated his stance on Thursday that Missourians should be forced to repay unemployment benefits that the state later determined they weren’t eligible to collect.
“There were mistakes made, there’s no doubt about that,” Parson said in response to a question about the issue during an online briefing.
“But at the end of the day I think there is a responsibility as taxpayers’ money, if somebody got more money than they should have got you should ask for it back and say ‘Hey, you owe that to the taxpayers.’ You don’t owe it to me but the people who paid it, because there’s going to be somebody else tomorrow wanting unemployment benefits too.”
Parson said he’s not sure what the legislature will do, but the state is required by law to collect overpayments. He did not address the fact that a bulk of the overpaid funds are from federal programs and a recent federal law gave states the ability to waive overpayments.
Original story from Feb. 2:
Missouri lawmakers filed several bills Tuesday to keep the state from collecting unemployment money from 46,000 Missourians it accidentally overpaid.
The move comes after two days of intense questioning of Department of Labor Director Anna Hui.
During a meeting of the House Special Committee on Government Oversight on Tuesday, Hui revealed that the department overpaid $150 million in state and federal unemployment benefits last year, or about 3% of all the money paid out.
Hui said those are full-year figures. The department previously told St. Louis Public Radioit overpaid $96 million between January and September.
Representatives of both parties challenged Hui for 2½ hours on the morality and financial feasibility of trying to recoup money that many people received months ago and have already used to pay bills.
Hui stressed multiple times that overpayments are not unusual and that state law requires repayment.
“At the end of the day we take this responsibility very seriously that we are entrusted with taxpayer dollars to pay out a benefit that people have to fulfill a particular criteria. It is not an entitlement program. It is based on the person's work history,” she said.
But the latest round of pandemic relief passed by Congress in December includes a provision allowing states to waive these overpayments, stating “collection must not be against equity or good conscience.”
After being pressed by several representatives, Hui confirmed that a bulk of the overpayment money is from federal aid programs and would be sent to the U.S. Department of the Treasury, not the state trust that pays out regular unemployment benefits.
Rep. Raychel Proudie, D-Ferguson, expressed her frustration with the department’s decision to go against federal guidance. She pushed back on Hui’s defense that her role is just to implement the rules.
“We’re using our discretion to collect taxpayer money out of our economy. This is a choice,” she said.
Rep. John Eggleston, R-Maysville, said the state shouldn’t make residents pay for its mistakes.
“You’ll be hard pressed to find a more fiscally conservative person than me. But we screwed up. To ask folks this late in the game — at this point most people have spent all of that,” he said.
Rep. Mark Elebracht, D-Liberty, questioned whether it makes financial sense to try to collect the money.
“How much money are we looking at spending here if everyone decides to appeal their case?” he asked. “Are we tripping over the dollars to get to the dimes when it comes to actually recouping this money because we’re going to end up paying out so much more to recover what we’ve paid out initially?”
Hui repeatedly stated it’s up to “state’s discretion” whether to waive overpayment of federal unemployment benefits. When asked to specify who makes that decision, Hui said her department worked with the governor’s office.
Last week, Gov. Mike Parson told reporters that people should pay back the money if it was given to them by mistake.
“Some people did try to defraud the system. We know that,” he said.
But Hui told lawmakers that less than 3% of the overpayments are due to fraud. She said most are due to the fact that many people filed unemployment claims for the first time, and the department is still dealing with an extremely high volume of claims.
Hui said Monday during another committee meeting that the overpayments boil down to the state later discovering some people weren’t eligible for unemployment benefits. She said the state is offering payment plans, but it could also decide to garnish wages.
“We are really trying to work with people. We understand, again, we get additional information. We know there are a lot of first-time filers. It’s a complicated program,” she said.
What’s in the new bills?
Three House Democrats from the St. Louis region — Doug Clemens, LaKeySha Bosley and Peter Merideth — filed separate bills to block the overpayment collection process.
They aim to change laws that mandate the department collect overpayments. Meredith introduced a resolution that calls on Parson to forgive the balance of non-fraudulent overpayments.
“The feds have clearly said folks should get to keep this money — why in the world would we then take it back from struggling Missourians to send it back to the feds?” Meredith said in a press release.
‘I will fight it’
Sandra Griffin is one of several Missourians who sent in public testimony to Tuesday’s meeting, detailing her overpayment situation.
The 63-year-old St. Louis resident got a notification in September telling her she was ineligible for unemployment benefits as of May and needed to repay nearly $8,000.
She’s an illustrator, and before the pandemic she worked part-time in schools helping students make picture books to supplement her Social Security check. Griffin said she believes the confusion about her situation comes from a law that prohibits teachers from collecting unemployment over the summer.
“But apparently that law was created before there was summer school is all I can figure, because summer school is a huge chunk of my survival,” she said.
Griffin wasn’t able to go back into classrooms until October, when some schools reopened in-person classes.
She was shocked to receive a notification months after checking with the office to ensure everything was filed correctly.
“I called multiple times whenever I had a question, and I was always told, ‘Oh, things look fine. You’re fine. No need to worry.’” she said. “There was never a ‘Oh, be sure to set it aside because we may want it back. Don’t spend it.’”
Griffin filed an appeal last year but never heard back. She’s filing another.
O’Fallon resident Jane Bagnall received a notification two weeks ago demanding more than $7,300.
Bagnall worked as a costume designer and technician in the theater industry when the pandemic hit, shutting down shows. That included two at St. Charles Community College, where she held a part-time contract.
Bagnall said the part-time job seems to be to blame for the confusion over her employment status. At the time, she also held a full-time contract with Stages St. Louis, which encouraged her to apply for unemployment when it had to shut down production.
Bagnall was given the same explanation as Griffin — those employed by an educational institution can’t draw unemployment funds over the summer because they have a “reasonable assurance” of being rehired the next semester.
“The thing is, because I’m a gig worker I am not reasonably assured anything,” she said. “I am hired per project, and when a project is finished there’s no reasonable assurance I would be rehired.”
She mailed in her appeal last week.
“Am I worried? Sure, they can decide, ‘I'm sorry, yeah it still applies, give us the $7,000.’”
Bagnall said she’s more angry at the department than she is anxious about paying back the money, even though she already spent it on bills.
“I will fight it,” she said.
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