Feds Say Illinois Can Take a Year to Refund Money They Unfairly Demanded From Residents For Unemployment Overpayments

Illinois unemployment beneficiaries who unknowingly received overpayments because of a mistake made by IDES believe a year is too long to wait to be repaid money that is theirs.

State Journal Register

If the state of Illinois made a mistake and started taking money from your unemployment benefits to make up for it or otherwise demanded that you repay the amount, the federal government says they have up to a year to pay that money back or any money you may have paid.

In November, what had already been a financially challenging year for thousands of Illinois residents, became an even greater hardship for some of them. This was when Illinois discovered it had made a huge mistake by not accurately calculating the amount of unemployment a large percentage of those receiving it deserved through the Pandemic Unemployment Assistance program (PUA). Instead of recognizing that given it was the states mistake and not due, in these cases, to intentional wrongdoing by the recipients so the state would need to take the loss, letters were sent to those in questions demanding they pay back the amount.

The notices put the blame squarely on the shoulders of the federal government saying nothing could done to rectify this. The letters stated that the federal government required that the money be paid back in full and that while the state understood this would create additional economic hardship for them, they weren’t able to waive repayment because of federal law. When letter recipients attempted to contact IDES to protest the action they received a message once more blaming the federal government, stating:

“Overpayments within the PUA system are an unfortunate consequence of a federal system haphazardly put together without much foresight concerning how it would negatively impact PUA claimant.”

There was a great deal of disbelief and anger that those who were already obviously in financial need due to a lack of employment because of the pandemic would be forced to pay for the mistake made by the state. In some cases, people were told they had to pay back the entire amount they received or sometimes more than they had received. For those still receiving benefits, money was withheld from subsequent payments. Letters were also sent to victims of unemployment insurance fraud who hadn’t received any of the money they were told they would have to repay.

Illinois senators Dick Durbin and Tammy Duckworth joined along with Senators from other states to propose the Relief for Working Families Act. This bipartisan legislation was intended to give states discretion regarding PUA overpayments, allowing them to waive repayments by those who acted in good faith and played no role in obtaining the extra payments. The bill was not voted on and died in congress. The terms of the bill were re-introduced under the CARES Act which was signed into law by President Biden. This legislation provided a federal bailout for states, allowing them to waive repayments when it was not the person’s fault they were overpaid benefits.

Now, the federal government has determined that Illinois will have at least a year to return whatever money those affected by overpayment mistakes who had funds withheld from their unemployment payments or who repaid some or all of the amount they were told they owed. Many say this is far too long for money that for some, was taken or paid to the state as far back as December of last year.

returned money to the State of Illinois say to the State of Illinois say they are not certain they can hold on that long for their refunds. An update from the U.S. Department of Labor grants S state unemployment departments flexibility when dealing with refunds.

Late last week, there were no direct answers regarding the question of how long it would take those in Illinois owed refunds to be repaid. IDES spokeswoman Rebecca Cisco released a statement that said only:

“IDES continues to work with claimants who have requested an overpayment waiver and the process by which refunds will be issued as those waivers are approved. The guidance for this process has evolved since the implementation of the CARES Act last year. The new, updated guidance from USDOL was just released yesterday. Illinois and other states are in the process of working with USDOL to better understand what this means for claimants with overpayments.”

Follow me to see more articles about Illinois.

...

Follow