An “overpayment” occurs when you receive unemployment compensation (“UC”) benefits that you are not entitled to. There are two types of overpayments: “fault” overpayments and “non-fault” overpayments. It is important to understand the overpayment you are dealing with in order to handle it appropriately. An employment lawyer can give you advice if you are unsure what steps to take after one occurs.
This type of overpayment occurs when you intentionally withhold or misrepresent information to obtain or increase UC benefits. For example, if you lie about being an employee (as opposed to being self-employed) to be eligible for benefits, you will be considered at fault. Once it is determined that you have been overpaid benefits, you will receive a Notice of Overpayment.
You are responsible for repaying a fault overpayment. Once the Notice is issued, you will have 15 days to repay. If the fault overpayment is not repaid in full within 15 days, you will be charged interest on the remaining balance. What you owe for a fault overpayment can be deducted from future benefits. Deductions can be taken out of future benefits during the year in which the overpayment occurred and in the six years following that year. For example, if your overpayment occurred in 2015, deductions can be made to recover that overpayment in 2015 (the year it occurred) and in 2016-2021 (the six-year period following).
If you make a false statement or withhold information in order to receive or increase your benefits, you can also be prosecuted and penalized. If you need advice, contact an employment lawyer.
This type of overpayment occurs when you are paid too much in UC benefits by no fault of your own. Suppose you receive a Notice of Determination saying that you are eligible for benefits and you begin to collect. Your employer then appeals and a Referee reverses the initial decision. The benefits you have already received are now considered a non-fault overpayment. Other situations may result in a non-fault overpayment as well. This is just one example.
A non-fault overpayment can be deducted from your future benefits in the year in which the overpayment occurred and the three-year period following. For example, if your overpayment occurred in 2015, deductions can be made in 2015 and in 2016, 2017, and 2018. The maximum amount able to be deducted is 1/3 of your weekly benefit rate. For example, if you receive $300 in benefits per week, up to $100 of that $300 can be deducted.
Whether your overpayment is “fault” or “non-fault,” an employment lawyer will help you decide what action to take.