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After Much Pressure, Missouri To Offer Waivers For Overpaid Federal Unemployment Benefits

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
State lawmakers have been calling on the Missouri Department of Labor for months to forgive overpayments. The department will launch a process at the end of the month allowing the 47,000 affected Missourians to apply for a waiver on a case-by-case basis.

The Missouri Department of Labor is implementing a process for people who were overpaid federal unemployment benefits last year to apply to keep the money.

During the height of the pandemic, the department mistakenly overpaid about 47,000 Missourians more than $150 million in mostly federal unemployment benefits.

The move to offer waivers for about $108 million of federal money comes after months of pressure from lawmakers. Theyurged the department to ease up on demands that people pay back the money or face having their wages garnished or liens placed on their properties.

The federal government advised states late last year to forgive the overpaid benefits.

State Rep. Peter Merideth, D-St. Louis, said that the waivers are a big step but that Gov. Mike Parson should have forgiven the money outright, “rather than creating some new bureaucratic process that people have to wade through.”

“It feels like we’re kicking them when they’re down and making it hard for them to navigate a problem that they didn’t create,” he said.

In a letter published Wednesday, a group of 10 Democratic representatives, including Merideth, called on Parson to forgive the nearly $40 million in state unemployment overpayments and to direct the labor department to stop collection efforts. Merideth is hoping Republicans will also sign the letter or send a similar letter to the governor.

A spokeswoman for the department said in an email that state law doesn’t allow the department to authorize a waiver for the state portion of benefits.

Merideth said that’s not true. He points to an appropriation passed in a budget bill last session, which allocated $48 million of federal relief money to cover the cost of the state portion of overpayments. A bipartisan group of lawmakers argued at the time that it was necessary to protect the state’s unemployment system, which is paid into by employers.

“The legislature doesn’t have to do anything. We already did our part,” Merideth said.

Lawmakers failed to pass legislation forgiving the overpayments, despite bipartisan support in the House.

Parson has previously said he thinks people should pay back the overpaid money.

Jim Guest, head of the volunteer lawyers program at the nonprofit Legal Services of Eastern Missouri, said he’s glad the department is finally offering a way to waive the federal portion of the overpayments.

“The vast majority of these recipients are people who were told they were eligible, were urged to apply for benefits, did apply for benefits, started receiving them and used them for their exact intended purpose — to put food on the table, to pay rent while they were unemployed,” he said.

“To find out then that you had to pay back this money was just a real hardship for these folks.”

Many individuals who received benefits were asked to pay back thousands of dollars.

Guest has been helping people appeal unemployment rejection and overpayment determinations, and some have won those cases. He said he will also help those who have already paid back the money or had funds garnished by the state.

The state said qualified people who have already paid back the money will be credited.

The department said it plans to send those eligible for the waivers a letter in the mail or an email by the end of the month with instructions on how to apply. Claimants will have 30 days to provide documentation that “overpayment was not a result of fraud or claimant fault.” The waivers will be granted on a case-by-case basis.

The department previously found that fewer than 3% of cases involve fraud.

Follow Corinne on Twitter: @corinnesusan

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