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  • Writer's pictureDavid Manes

Fault based overpayments: when and why they are classified as fault based

A fault-based classification of unemployment benefits can be a difficult financial blow to a claimant. The typical scenario goes like this: a recently unemployed person applies for benefits. They are initially found eligible and they begin to collect their payments. Then, the employer appeals and raises questions about the legitimacy of the claim to benefits. When this occurs, the Unemployment Compensation Service Center (“UC Service Center”) may cut off a claimant’s benefits and classify their overpayment as fault based. The fight is not over, but the claimant now comes under a duty to repay the money they were previously relying on for survival. Why did this happen and what can be done about it?

Fault based classification

An overpayment is generally found to be fault based when the UC Service Center determines that a claimant knowingly provided false information to the Unemployment Compensation authorities. For example, if a claimant found a new job or was self employed, yet they applied for benefits and stated that they were unemployed, their overpayment would be considered fault based because they lied about their employment status. Additionally, if a claimant lied about how they were separated from their job the overpayment may be considered fault based. For example, if a claimant said that they had been laid off because their job was eliminated, when in fact they voluntarily quit, this would amount to the provision of false information on an application and a fault based overpayment.

Fighting a fault based overpayment

If your overpayment is classified as fault based, you may still be able to appeal and have it re-characterized as non-fault. This can be done because oftentimes claimants put information on the application that is false, but they do so unintentionally. If the claimant can prove that their mistake was unintentional, then their overpayment cannot be considered fault based. This is where a skilled unemployment attorney can make a huge difference for a claimant. They know how to use the facts and the law to show that the initial mistakes were unintentional. Usually, the fault based determination is made too quickly and once all the information is presented to the UC Service Center, fault based findings are reversed.

Skilled attorneys provide a distinct advantage

Fault based overpayments can be financially devastating because they may require immediate repayment. The UC Service Center may take collection actions to enforce the debt. A good attorney may be able to have that overpayment redefined as non fault based and it can save you from having to immediately repay it. In fact, non fault overpayments are deducted from future benefits, so you may be insulated from repaying the debt for a very long time. If you have been charged with a fault based overpayment, do not hesitate to contact KM&A for a free consultation concerning your legal remedies.

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