Waivers, write-offs planned to relieve $1.6 billion in Massachusetts unemployment overpayments

By Colin A. Young

APRIL 14, 2022…..The state’s Department of Unemployment Assistance will be in touch with Pandemic Unemployment Assistance and Unemployment Insurance claimants in the coming days to detail state and federal relief options that the Baker administration said Thursday would resolve about $1.6 billion or roughly 71 percent of overpayments.

There are about 353,000 outstanding cases of workers who received more money in joblessness aid than they should have between March 8, 2020 and Jan. 31, 2022, to the tune of a cumulative $2.225 billion, according to the Baker administration, which has been working for months to untangle the convoluted situation.

Between two new state efforts announced Thursday and a partial waiver from the U.S. Department of Labor, the Executive Office of Labor and Workforce Development said 287,656 of the 353,000 outstanding overpayment claims can be resolved. That would leave 65,344 claimants with a total of $649 million worth of overpayments still to be ironed out.

The U.S. Department of Labor has partially approved a request from Massachusetts to provide relief for claimants with overpayments related to a new employment substantiation requirement that was created midway through the program. But rather than signing off on the blanket waiver the state requested, the Labor Department approved relief for only certain weeks of overpaid benefits.

“The practical effect of USDOL’s decision is that most claimants with employment substantiation overpayments will receive partial relief because some weeks of overpayments will be waived. However, very few claimants will receive complete relief, as Massachusetts had requested,” EOLWD wrote in a press release. “The blanket waiver approved by USDOL covers approximately $349 million and provides partial relief to 53,487 claimants with outstanding overpayments.”

The partial waiver forgives 41 percent of applicable overpayment dollars but resolves only 656 claims in full, the administration said.

“Because Massachusetts advocated for complete relief for these claimants, it has also prepared new solutions to provide additional relief, with the goal of making it as easy as possible for claimants to be relieved of non-fraudulent overpayment obligations, in both the PUA and UI programs,” EOLWD said.

The Department of Unemployment Assistance said it will soon file emergency regulations to expand the grounds for a state-issued overpayment waiver for both PUA and UI overpayments to address claims not resolved by the partial federal waiver. The department said it will pre-qualify eligible claimants for an overpayment waiver and provide a “one-click” option for a person to be granted a waiver.

The expanded state-issued waivers are expected to resolve 154,000 claims worth a total of $782 million. DUA said it will contact eligible claimants directly via email and letters.

For another 133,000 claims worth a cumulative $475 million, DUA said it will “set aside overpayments involving fraudulent claims for eventual write off as provided by statute.”

“A significant portion of these overpayments are uncollectible, as they are likely connected to a nationwide fraud scheme involving stolen identities,” EOLWD said. “Claimants nominally connected to these overpayments likely did not actually receive benefits because their identities were stolen and used by criminal actors to obtain benefits illegally.”

For both state-level relief valves, EOLWD said the Baker administration plans to file for funding necessary to offset the impact of state-issued UI waivers on the UI Trust Fund and to ensure employers are not adversely impacted by the state’s approach.