About 46,000 Missourians who received overpayments of unemployment claims in the last year are closer to getting some relief from having to pay all that excess money back.
Months ago, the Missouri Department of Labor started sending out letters to Missourians who had been overpaid through unemployment claims. There were more than $148 million in overpayments made to citizens over the past year.
Since March of 2020, nearly 489,000 Missourians have received unemployment benefits, and about 46,000 of those were overpaid. It caught many off guard as the money had been given to them almost a year ago in some cases and was most likely spent on necessities throughout the pandemic.
The Missouri Budget Project found that $1.5 million in unemployment overpayments were issued in Buchanan County, which accounts for about 4% of all payments in 2020.
The federal government’s CARES Act allows states to use stimulus money to cover the costs of federal unemployment overpayments. For that to happen, legislation has to be passed at a state level.
The first big step in that process was made last week as House Bill No. 1083 passed through the Missouri House of Representatives by a vote of 157-3.
“It basically says as long as the recipient did not commit any fraud and try to cheat the system, they will have the opportunity to have the federal portion of the overpayment waived,” said Jay Eggleston, R-Maysville. “That part becomes a gift.”
Eggleston, who is on the Government Oversight Committee, said that the chair is the one who brought the issue to the table. The language in the bill allows for federal dollars to cover a significant portion of the overpayments given out to citizens. According to Eggleston, in most cases three quarters of the overpayments will be paid through the federal government.
“They have to take it on a case-by-case basis,” Eggleston said. “That is law and there was language for that in the CARES Act sent down by the federal government. You cannot grant a blanket waiver for the entire population of folks who were overpaid.”
The average amount in overpayments was $3,000 to $4,000 per person. But in some cases it could have gotten as high as $15,000.
Eggleston said he believes it’s not fair to punish people who had a need for the money and did not purposely fraud the system.
“But it was so much money and so long ago, folks used that on rent, food and utilities. Now to make it a burden of debt would be too much for people to handle right now,” Eggleston said. “The federal portion, not having to pay that back should provide a lot of relief for folks on an error that they didn’t make.”
If the bill becomes law, the impacted 46,000 Missourians still will have to pay back any state portions of overpayment, which amounted to about 27% of the total amount statewide. But there is no interest on the money, no penalties and payment plans will be set up to reduce stress of paying it back.
It’s unknown when the bill will make it to the Missouri Senate floor, but Eggleston said he has not heard a lot of opposition from lawmakers in that chamber. He said he hopes this legislation can be passed in a bi-partisan fashion.