Legislation prohibiting the Unemployment Insurance Agency (UIA) from seeking to recover improperly paid benefits after three years was reported by the Senate Labor Committee this week.
Background:
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- During the COVID-19 pandemic, $2.7 billion in overpayments were sent to recipients.
- Given the sharp increase in claims filed, the UIA was moving quickly to get funds to claimants, which led to errors.
- Around 350,000 residents are being asked to repay those funds.
- Recovery of the funds was put on hold for three years while a legal challenge worked its way through the courts.
- This past fall, collections were allowed to restart.
- The program is a joint Federal-State program, and the U.S. Department of Labor requires states to get back a portion of overpaid benefits.
Key Points:
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- Senate Bill 700 was introduced by Senator Darrin Camilleri (D-Brownstown).
- It prohibits recovery of the funds after three years from when the funds were paid.
- Requires the UIA to consider benefits paid between February 7, 2020, and September 5, 2021, to be considered an administrative or clerical error, and the agency must waive the recovery of those benefits.
- The legislation provides an exemption for benefits paid due to fraud or identity fraud.
The bill was referred to the Senate Committee of the Whole for further consideration.
