How to Handle Unemployment Benefits Overpayments
As a senior who receives unemployment benefits, you may have to pay back overpaid unemployment benefits from your state unemployment office. An unemployment insurance overpayment, or UI overpayment, occurs when you receive unemployment assistance that you were later determined to be not eligible or entitled to receive. Regardless of the reason, you may be responsible to repay overissued unemployment insurance and any applicable penalty. The way you must repay overissued unemployment insurance and how such issues are handled differs depending on the state you live in. If you are a senior with a notice to pay back overpaid unemployment benefits, your state unemployment office will typically inform you through the mail with an overpayment notice. The notice to pay back overpaid unemployment benefits will include information about the amount you may have overpaid, in addition to any penalties due because of overpayment. The notice may also inform you how to pay unemployment overpayments as a senior and an explanation why you were overpaid. For more information on UI overpayments and instructions of what to do when you receive a notice of overpayment, download our helpful free guide.
Why do UI overpayments occur?
You may have to pay back overpaid unemployment benefits if your state UI agency believes that you received too much unemployment assistance, even if you met the initial eligibility requirements for UI benefits. This ruling to pay back overpaid UI benefits can be determined in a number of ways. For example, your employer may have filed a protest, someone may have reported a tip to a fraud hotline, your claim may have been audited or you may have reported your own ineligibility.
Laws regarding senior repayment of overissued unemployment insurance vary from state to state. Typically, your state unemployment insurance program will classify a UI overpayment in one of two ways: fraud and non-fraud. A fraudulent UI overpayment may occur when you willingly misrepresent or conceal information when filing a claim to receive benefits. A fraud UI overpayment is considered a criminal offense and may result in a penalty. A non-fraud unemployment insurance overpayment occurs when you receive an overpayment because of an error that was no fault of your own. In some states, you may not receive a penalty or be responsible for repaying a non-fraud overpayment. You can learn more about overpaid unemployment benefits by downloading our free guide.
Learn Consequences for Failing to Repay Overissued Unemployment Insurance Benefits
If you do not repay overpaid unemployment insurance benefits, the consequences for seniors may vary depending on your state. For example, if you fail to pay back overpaid unemployment benefits, you may face some or any of the following consequences:
- The state UI agency may withhold a portion of your benefits to repay the overpaid funds if you file for unemployment benefits at a later date
- A court can order the withholding of your wages (wage garnishment) to repay overpaid unemployment insurance
- You may need to use state income like tax refunds, lottery winnings, or other money owed to you by the state to pay back the overpaid benefits
- A court may file a lien against your property to help pay back a UI overpayment
- You may face criminal prosecution that could result in a fine, imprisonment and/or loss of future benefits
If you learn about repaying overissued unemployment insurance and do your best to prevent late repayment, you can avoid penalties and consequences associated with failing to repay UI funds.
How to Repay Unemployment Overpayments
If you have to pay back overpaid unemployment insurance benefits, you must follow the instructions included in the notice you received from the UI agency in the mail. Your notice to repay overissued unemployment benefits should include directions on how and where to send a payment for the total amount due. This total may include both overpaid benefits and penalties, if applicable. In some states, you can pay back the amount online or by phone using your bank account, routing number and debit or credit card. If you must pay back overpaid unemployment benefits, you may be able to request a payment plan for seniors, if necessary. Depending on the state, you may not need to pay back overpaid unemployment benefits if the reasons for overpayment were non-fraudulent, especially if you are senior citizen experiencing financial difficulties. Each state agency may have different instructions for arrangements to pay back overpaid unemployment assistance, so it is important that you review agency instructions thoroughly.
How to Appeal an Overpayment Notice
If you believe you believe an UI overpayment notice was issued in error, you have a right to file an appeal. Instructions on how to appeal a UI overpayment will provide information on steps to take for appeal, along with any types of documents you may need to provide to dispute the overpayment ruling. If you believe you are being asked to pay overpaid unemployment insurance benefits in error, file an appeal as soon as possible. In many cases, a UI overpayment appeal must be filed within 30 calendar days of the date on the notice. Typically, you must submit UI overpayment appeals via mail. You may be required to include information such as your name, Social Security Number, employer name and a detailed reason for disagreeing with the notice in your appeal.