Massachusetts plans $ 1.6 billion relief in overpayments of unemployment insurance

The announcement came nearly two weeks after the U.S. Department of Labor rejected Governor Charlie Baker’s request for permission to massively waive all federal overpayments. Those benefits, including federal Pandemic unemployment assistance accounts for most of the outstanding cases, while the rest is linked to government benefits.

Instead of the Ministry of Labor OK had a general dispensation for only a small group of plaintiffs who were overpaid and only for some amounts.

“This has the potential to help many,” said Rory MacAneney, an employment lawyer at Community Legal Aid in Fitchburg. “While this is a welcome development, it is still a fact that very few plaintiffs have actually applied for exemptions – simply because they do not know what an exemption is, that it is available, or how to apply.”

The Unemployment Assistance Department was hit by a stream of unemployment claims that started in March 2020. While overwhelmed, it eventually sent more than $ 33 billion in benefit checks to 4 million people over two years.

But more than $ 4 billion in claims were subsequently marked for potential failures. After the Globe detailed the issue of overpayment in January, the legislature and advocates put increasing pressure on the administration to come up with a solution for benefit recipients who did not commit fraud but who were later deemed unfit or receiving more money than they should.

The management plan has three components.

First, the state will write off $ 475 million in state and federal benefits on 133,000 claims designated as overpaid due to lack of identity verification.

“A significant proportion of these overpayments are irrecoverable as they are likely to be linked to a nationwide fraud scheme involving stolen identities,” the Executive Office of Labor and Workplace Development said in a statement. In fact, concerned plaintiffs never said that received services which instead went to scammers.

Other, the state revealed Thursday that more than 53,000 people would be eligible for partial relief under the general exemption approved by the Department of Labor. It covers $ 349 million in PUA overpayments triggered by recipients’ lack of work history information.

Proof of employment was a requirement set by Congress after the PUA program was well under way and the lack of such documentation was the most common reason why Massachusetts unemployment applicants were retroactively disqualified from federal Help.

The general forgiveness will be limited to PUA payments made before March 23, 2021, where the state told the recipients that they must substantiate their work history. Subsequent benefits can still be waived, but only after DUA has looked at each case individually. The Agency will return any previously repaid funds to creditors.

Third, DUA will soon file emergency measures to extend the exemption criteria to cover as much as $ 782 million in overpayments to 154,000 plaintiffs who are not eligible under the Labor Department’s decision. The state did not cite the new criteria, but it said it would “expand the universe of people who qualify” for exemptions for federal and declaratory overpayments.

The administration said it would ask the legislature for money to compensate for repayments forgiven under depreciation or extended waiver criteria.

The general dispensation requested by the administration federal government would have eliminated the need to review tens of thousands of waiver requests one by one. Since the beginning of the pandemic, DUA has waived $ 2 billion in overpayments of 224,000 claims.

Now DUA is working on a “one-click” system that the state said would simplify and speed up the process of granting exemptions.

MacAneney, the employment attorney, said the number of Massachusetts residents who will receive financial relief will depend on the state each being able to go out and process requests from them without legal advice or with limited English skills.

“The real impact of these changes will depend on whether and how DUA incorporates experts in language access, including design and user experience in the development and monitoring of new systems, processes and communications,” she said.

Larry Edelman can be contacted at Follow him on Twitter @GlobeNewsEd.

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