To lose your job and have to depend on unemployment benefits to make ends meet is bad enough. Finding out you were actually overpaid and now owe a fat check to the unemployment insurance agency, is just adding insult to injury. This has been a problem for thousands of Washington unemployed workers. In fact, according to statistics published by the Department of Labor, over 14 percent of all unemployment insurance payments were improper and were therefore an overpayment.

If you find yourself in this situation, you likely have many questions on your mind. For instance, you may be wondering what an overpayment really means? How can you repay the Employment Security Department for an overpayment? Or, what should you do if you cannot afford the minimum payment set by the Employment Security Department? This post will deal with these questions and provide practical advice on what to do if you have received unemployment insurance overpayments.

What is an overpayment?

Overpayments include any payment issued by the Employment Security Department which is later denied because the recipient was not entitled to the benefits. There are many ways you could end up with your application denied, such as failing to file your work search documents correctly, or not providing evidence that you were able and available to work during any given period. Notice how it is not only the unemployment benefits you must repay if the Employment Security Department decides they have overpaid you. For instance, if your benefits included a deduction to your IRS taxes or a child support deduction and your entitlement to these benefits is denied, you must also repay these benefits in addition to your insurance payments.

How To Pay?

You may repay the Employment Security Department by mail or electronically. Click here to repay electronically or send your payment to the Employment Security Department’s Benefit Payment Control unit’s P.O. Box 24928, Seattle, Washington, 98124-0928. If you decide to mail your repayment make sure you include your full name, identification number or social security number. Notice that you may not repay overpayments at the local offices of the Employment Security Department.

Overpayment Calculation

The Employment Security Department calculates your overpayment amount using different formulas depending on the reason for the overpayment. If you were overpaid due to fraud or misrepresentation on your part, you must repay every week the weekly amount your received or 3 percent of the total balance, whichever is the largest amount.

However, if you were overpaid  for reasons other than fraud, you must repay weekly a third of your weekly benefit, 3 percent of the total balance or $25, whichever is the largest sum. 

By Andrew Latham.

The scandal of overpaid unemployed workers that recently hit the news has not spared the state of Washington. According to the Obama administration unemployed workers were overpaid over 17 billion dollars. This, quite predictably, triggered an onslaught of complaints about the entire system and created the picture of an army of cheats milking an incompetent unemployment insurance agency.

As is usually the case, the real story is not so simple. Certainly, there are workers who have purposely cheated the system and received payments they knew they were not entitled to. Yet, in many cases the reasons for overpayment are more technical than malicious and do not necessarily involve willful wrongdoing. To get a better picture of the situation, let us look at the figures.

Washington Overpayment Figures

According to the figures published by the United States Department, the State of Washington overpaid nearly $793 million over a period of three years. This is a significant percentage of the entire unemployment insurance bill for Washington; 14.26 percent of all payments during this period were improper. Of these improper payments  71 percent were caused by work search issues. This means the unemployment insurance agency was unable to prove workers met the state’s work search requirements, which automatically disqualifies a candidate from receiving unemployment benefits. Needless to say, failing to meet the requirements of the state of Washington with reference to unemployment and work search issues is extremely easy. For instance, failure to report or misfiling your proof of work search for any given week is enough to disqualify you.

The other big culprit for the overpayments were benefit year earnings, which was responsible for 12 percent of all improper payments. This is a case where fraud, although not the only explanation, is much more likely. Workers who are overpaid due to benefit year earnings are those who continue to claim for benefits after they have returned to work. Although it is harder to justify this “error”, it is easy to see how workers struggling to make ends meet may feel that declaring a part time that wouldn’t be enough to pay for their bills and may disqualify them (often it doesn’t) from receiving benefits may fail to mention their new job to the unemployment agency.

The rest of the improper payments were mostly caused by employers sending inaccurate or late information about their workers or workers being unavailable for work because they were otherwise engaged, such as convalescing in a hospital room or locked in a prison cell.

However, the reason for these payments is hardly the most pressing issue for those who are informed they were overpaid and now have an unexpected bill to repay. What can you do if you realize you have been overpaid? What is the process to repay the money and set the record straight? This will be the theme of our next article.