KANSAS CITY, Mo. — A Missouri bill might be the light at the end of the tunnel for residents who have been told they owe back unemployment benefits due to an agency error.
41 Action News first reported about the error in July when Missourians received notices stating they were overpaid and must repay the money.
The Missouri Department of Labor later acknowledged the error and said nearly 46,000 Missourians received notices of overpayment.
Delores Rose, a Department of Labor spokesperson, said the state estimates $148 million went out in overpayments in 2020, which includes fraud and nonfraud payments. That's roughly 3% of the more than $5 billion in unemployment benefits paid during the year.
In an email, Rose said a "normal" year like 2019 included $236 million in unemployment benefits with just more than 5.3% in overpayments.
"The federal standard for overpayment is to be less than 10%," Rose said.
Rose said an overpayment happens after a person begins receiving benefits, if new or additional information is received from a claimant or employer who changes the initial determination of entitlement to benefits.
Of the 2020 overpayments, Rose said fraudulent overpayments made up just less than 3%. Roughly $40 million was from state benefits and $108 million was from federal programs.
House Bill 1083, sponsored by Rep. J. Eggleston (R-District 2), would waive the federal portion of the overpayments.
"The federal government has language in the CARES Act saying states can forgive overpayments if they deem it necessary," Eggleston said.
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Eggleston said a legislative fix to the issue has gained bipartisan support considering those claimants did nothing wrong and likely spent the money on necessities such as rent and utilities.
"Because of how the federal government piled on so much extra money, you're talking thousands of dollars that have now gone from a lifeline to an anchor of debt," Eggleston said.
Rose said the average claimant affected owes back $3,200.
If signed into law, Eggleston said the bill would still require claimants to pay back the state portion.
"But the department has committed to me they will make those repayments in a no interest, no penalty, easy payment plan on a case-by-case basis," Eggleston said. "So I think that's really a best case scenario for all involved."
It will be up to the Department of Labor to contact all of the affected claimants. They will need to apply through a waiver and be accepted in order to not have to pay back the federal money.
Eggleston said the amnesty also would apply to those who have already set up payment plans with the state.
Madison Mead said it's been months of stress awaiting answers about the issue. She received her overpayment notice over the summer and said the bill advancing through the House takes a weight off her shoulders.
"It's really just been constant stress," Mead said. "I'll forget about it for a couple of days and then I'll remember again and be super anxious and stressed about it."
Mead said after working with a department representative, she learned the job she filed a claim for was exempt for filing unemployment. However, she was never notified by the department and started receiving benefits. She said she believes the department might have used the information for her previous job to send her payments, which she had quit voluntarily.
"They could have at least told me, 'Hey, you can't file unemployment on this job,' instead of doing it for a different one I was not trying to claim unemployment from," Mead said.
Eggleston said haste to get payments out to Missourians could be to blame for the overpayments, which caused the department to approve claims that shouldn't have been.
"I think we all realize that the huge influx in unemployment claims really overwhelmed the Department of labor and how to handle them," he said. "Normally, they handle around 100,000 a year and almost overnight shot up to nearly a million a year."
As months have gone by without answers from the department, claimants like Mead and Cheray Johnson have been fearful the state will take tax refunds or garnish wages.
"I've been kind of afraid to do my taxes because I don't know how it's going to affect my taxes or anything," Mead said, "which adds even more stress because obviously that has to get done."
In February, Johnson told 41 Action News she received letters saying the state can garnish wages and take tax refunds.
"Every night I have a hard time sleeping just because I don't know any day now if they're going to garnish my wages," Johnson said.
Other lawmakers have said a part of the problem could have been that the state waived a one-week waiting period, which would normally catch errors, in order to expedite payments.
When asked about this, Rose said the department temporarily waived it to help Missourians in need at the height of the pandemic.
"Waiving the waiting week requirement for COVID-19 claims allowed unemployed workers to receive payment for a week for which they would not otherwise have received payment until their regular unemployment benefits were exhausted," Rose said. "As businesses began to reopen in Missouri, the waiting week requirement was reinstated. Additionally, temporarily suspending or waiving the waiting week was required by the federal legislation for states to be eligible for federal funds under the CARES Act."
H.B. 1083 was perfected by a voice vote Monday. Eggleston said he is confident it will receive official approval later this week and make its way through the Senate.
"I hear no negativity on the Senate side so I assume they will want to take this up as a priority as well and hopefully we'll get some relief to the folks very soon," Eggleston said.
Missourians affected will be anxiously waiting.
"I just want it to be over with, I want it to be resolved so I don't have to deal with it ever again," Mead said.
