The COVID-19 pandemic acted like a torpedo fired into the side of the economy, a jolt that was unprecedented in speed and severity.
With the CARES Act, the federal government supplemented state unemployment benefits in an attempt to help people ride out the storm. Since March of 2020, nearly 489,000 Missourians have received unemployment insurance payments, many of whom entered the year never dreaming that they would need to apply.
Some Missourians, about 46,000 in all, received another jolt later in the year. Some benefits were paid out in error, largely due to administrative problems tied to the unprecedented volume of unemployment claims.
It amounted to nearly $150 million, or about 3% of the state’s unemployment payments in 2020. That may sound like a small amount, but it isn’t to the person who long ago spent that money on mortgages, rents and bills. It’s unlikely that many Missourians tucked this money away for a rainy day.
The state, however, wants its money back, even if there was no fraud involved in the application process. Those who weathered the COVID-19 storm find themselves in a difficult position, including some in Northwest Missouri.
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. In Worth County, more than 6% of payments need to be returned.
The Missouri Legislature moved to ease the concerns of those who received what must have been an alarming letter from the Department of Labor. This week, the Missouri House advanced legislation, sponsored by Rep. J. Eggleston of Maysville, that would forgive overpayment of the federal portion of unemployment benefits, as long as the money wasn’t received fraudulently.
The state estimates that fraud was involved in only 2% of the 46,000 cases.
Final passage of this bill would go a long way toward helping Missourians who dug out of a financial hole to avoid jumping right back in. They should appreciate the relief, although they may not quite jump for joy.
That’s because the federal portion of unemployment benefits amounts to about 73% of the payments. Those who received overpayments still will be responsible for 27%, for a total of $39 million statewide. Missouri law requires the Department of Labor to pursue the overpayments, so action would be needed at the legislative level to provide additional relief.
Curiously, state lawmakers who often talk of relieving the burden of government balked at an amendment to forgive the state portion.
To err is human. To forgive, especially when you’re the one who has to absorb the cost, is still divine.