An individual who files for unemployment compensation benefits (“UC Benefits”) may be found eligible to receive them. An individual is then entitled to collect his/her UC Benefits if found eligible. However, there are certain situations where an individual will be collecting UC Benefits and then get notice that they are in overpayment of benefits. What does that mean?
If you receive a Notice of Determination of Overpayment of Benefits, that means the UC Service Center has determined that you received UC Benefits to which you were not entitled to.
What does it mean to be in NON-FAULT overpayment?
A NON-FAULT or NON-FRAUD overpayment is when the individual, through no fault of their own, received UC Benefits to which they were not entitled. In this case, the individual did not contribute to the overpayment. The individual did not knowingly or intentionally provide false information to the UC Service Center in order to obtain benefits.
For example, let’s say an individual was originally found eligible for UC Benefits. If the Employer appeals and the individual is no longer eligible for UC Benefits, the individual may be found to be in NON-FAULT overpayment.
Do I have to pay back the NON-FAULT overpayment?
With a NON-FAULT overpayment, the individual received UC Benefits that he/she was not entitled to through no fault of their own. However, the individual is still required to pay back the overpayment.
Under Section 804(b) of the Unemployment Compensation Law,
Any person who other than by reason of his fault has received with respect to a benefit year any sum as compensation under this act to which he was not entitled shall not be liable to repay such sum but shall be liable to have such sum deducted from any future compensation payable to him with respect to such benefit year, or the three-year period immediately following such benefit year: Provided, That with respect to overpayments of one hundred dollars or more, recoupment from such future compensation shall not exceed one-third of the maximum benefit amount to which such person is entitled during any such subsequent benefit year nor one-third of the weekly benefit amount to which such person may be entitled for any particular week.
In simpler terms, the overpayment is taken out of future UC Benefits. If the individual is in overpayment of $1,000, that $1,000 will be taken out of future UC Benefits. It is important to remember that recoupment of overpayments will not exceed 1/3 of an individual’s maximum benefit amount. If the individual receives a benefit amount of $300, the most that can be taken out for recoupment purposes is $100.
It is also important to remember that recoupment is only taken out of future UC Benefits filed within the three-year period immediately following such benefit year. Therefore, recoupment will not be taken out of UC Benefits collected 10 years after the benefit year in question.
A NON-FAULT overpayment is different from a FAULT overpayment. In terms of overpayment of UC Benefits, the best outcome is a NON-FAULT overpayment.
However, there are some circumstances where a NON-FAULT overpayment can be eliminated and no overpayment exists at all.
