Federal unemployment overpayments may not have to be repaid in full


JEFFERSON CITY, MO. — Missourians who were overpaid unemployment benefits might not have to worry about paying a portion of it back. 

Missouri’s Department of Labor and Industrial Relations said Tuesday if you apply for a waiver, you’ll get to keep the federal portion of your overpayment. This does not include the state’s part, because the department said under Missouri law it’s not allowed. 

Democratic lawmakers on Wednesday announced they were sending a letter to the governor asking him to offer relief for the state portion. 

“These are working families, these are people who did nothing wrong,” Rep. LaKeySha Bosley, D-St. Louis, said. “They should not be penalized for the government’s mess up.”

According to the department, more than 46,000 Missourians were overpaid unemployment benefits during the pandemic. Head of the department Anna Hui told lawmakers during session, more than $5 billion was paid out in unemployment benefits in 2020, compared to 2019 when the state only paid $236 million. 

The state has asked those who were overpaid to return the money. Cindy Knittig is a bus driver in the St. Louis area who received a $2,400 bill last fall demanding repayment. 

“All these overpayment letters started coming and threatening letters saying, ‘We’re going to garnish your wages, we’re going to put a lien on your property,'” Knittig said. “We use that money for our mortgages, for our car payments, for our groceries to live when we had no work, no income.”

On the other side of the state in Lawson, Amy Minich had her wages garnished. 

“Didn’t ask, didn’t know, I got a letter after the fact so they’re already taking the money away from me,” Minich said. “It’s very difficult to tell your kids, hey we can’t do that, we can’t do any of these things, we can’t afford this today because mom has no money today.”

Minich was employed at Ford Motor Company when the business decided to close its doors for a few weeks in March 2020. She said she was laid-off and then once allowed back to work, she stayed home with her 4-year-old who suffers from health issues. 

“The pain that is has caused my family, just depression alone worrying about how is this going to work, how are we going to make ends meet,” Minich said. 

In total, the letters from the state tell Minich she must pay back $9,000. 
“Which of course put immediate panic into my world because how am I going to pay my bills, what are we going to do if I don’t have an income coming in,” Minich said. 

The labor department reports the average person owes $4,000, totaling around $150 million. Tuesday night, an announcement from the department said to avoid repaying the federal portion, which makes up about 75 percent of overpayments, people must apply after they receive a repayment letter. 

The potential waiver only applies to the federal overpayments given from Feb. 8, 2020 through June 12, 2021 under these programs: 

  • Federal Pandemic Unemployment Compensation (FPUC)
  • Pandemic Unemployment Assistance (PUA)
  • Pandemic Emergency Unemployment Compensation (PEUC)
  • Mixed Earners Unemployment Compensation (MEUC)
  • Lost Wages Assistance (LWA)

Gov. Mike Parson said Wednesday he was “fine” we the department offering waivers for the federal portion. 
“I’ve said all along if it was a legitimate mistake, we’re fine with that, but if there’s anything besides that, you’re not going to get a blanket waiver,” Parson said. “I think we are still going to work on the state portion of that, we’ve talked about that several times.”

For now, collections on the state portion will begin in August. Democrat lawmakers are asking the governor to prevent that from happening. IN the letter to Parson, it states, “You have the legal authority as governor to correct this injustice and provide relief to Missourians who are suffering because of governor’s mistakes.”

During session, lawmakers on both sides of the aisle passed a budget with $48 million in CARES Act funding going towards the state portion of overpayments. Parson did not veto that line item. 

“In addition to the federal portion of these alleged overpayments that you intended to now finally forgive, the legislature has also given you clear direction to waive the state portion.

Both the House and the Senate overwhelmingly passed HB 7, which included a specific line item from federal relief funds to cover the repayments of overpayments to the state’s unemployment trust fund. As you did not veto this line item, it seems you must agree with its purpose,” the letter states.

Rep. Doug Clemens, D-St. Ann, is one of the Democrats that signed the letter to the governor. 
“During this crisis, money has already been paid by working folks into unemployment insurance and taxes, right now during this crisis, these folks need that money in their pocket to keep a roof over their head, money also helps keep Missouri’s economy rolling forward,” Clemens said. 

Rep. Peter Merideth, D-St. Louis, said the department has communicated that 97 percent of the overpayments were non-fraudulent payments.

“We should be forgiving them,” Merideth said. “That is what many other states are doing, they are taking care of their people and our state seems to just want to make it hard.”

As for Minich and Knittig, they would like the governor and state to forgive not only the federal portion, but the state part as well, as it’s money that’s already been spent. 

“For the governor to expect us to pay all this money back is morally and ethically wrong,” Knittig said.
The department said Missourians who were overpaid benefits and are eligible to keep the federal portion of overpayments will be notified in July and given instructions on how to apply for a waiver. 

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