‘This is cruel and unusual punishment:’ Thousands waiting for answers on unemployment overpayment waivers

Angela Matthews, an administrator of a Facebook group for overpayment recipients, runs a food truck and catering business that was shut down because of the pandemic. The state said she was overpaid $13,000 in unemployment though she provided the documents they asked for. She is now speaking up for other people being told they have to pay back money they were overpaid through no fault of their own.

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Angela Matthews, an administrator of a Facebook group for overpayment recipients, runs a food truck and catering business that was shut down because of the pandemic. The state said she was overpaid $13,000 in unemployment though she provided the documents they asked for. She is now speaking up for other people being told they have to pay back money they were overpaid through no fault of their own.

Ohio has processed around 16% of 155K submitted applications

State officials have processed roughly 16% of the approximately 155,000 submitted applications from Ohioans trying to avoid paying back unemployment benefits the state says they were overpaid amid the pandemic.

Of the just over 25,000 overpayment waivers completed, roughly 13,000 were approved, waiving $72.1 million in overpayments. The Ohio Department of Job and Family Services denied 7,126 waivers, totaling $67.9 million. The rest were settled outside the waiver process.

ODJFS provided these numbers to the Dayton Daily News as a year-end snapshot as of Dec. 27, and stress applications continue to come in and be processed.

Non-fraudulent unemployment overpayments since the beginning of the pandemic are estimated at more than $4.9 billion. This is money ODJFS says was accidentally paid to recipients improperly as they rushed to stand up new unemployment programs and get aid out the door during the pandemic. Another $496 million was lost to fraud.

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Meanwhile, Ohioans navigating the waiver process say they were overpaid through no fault of their own and fear that if they can’t get a waiver, the state will withhold their income tax check.

“Imagine a single mom that’s already stressing and struggling and it’s the holidays and you think you got this $10,000 overpayment, and you’re being told your only relief for the year, which is typically an income tax return for most people, is going to be taken,” said Angela Matthews, an administrator of a Facebook group for overpayment recipients.

“This is cruel and unusual punishment,” Matthews said.

ODJFS officials say they are not actively pursuing collections on any overpayments until a final decision is made on whether to grant a waiver.

‘Getting kicked while we were down’

Matthews owns a food truck and catering business in Columbus that worked the tailgates at Ohio State University games. When those games, weddings and all other events were cancelled last year her income stopped.

Since she is self-employed, she qualified for the Pandemic Unemployment Assistance Program created by federal lawmakers to assist people like her who don’t qualify for traditional unemployment. The vast majority of the state overpayments — $4.2 billion — were in the PUA program, which ended in September.

Matthews shared with the Dayton Daily News the same 1099 tax info she provided to the state, which listed her income in 2019 as $10,706. The state input her income as $30,033. Based on this, they started sending her weekly checks in May 2020 for $480.

Matthews wasn’t alone. She shared the documents from her sister-in-law, whose tax form 1040 said her income was $18,350; the state input her income as $51,972.

Matthews said that they called ODJFS and reported that the amounts seemed off. “What we were told was that was what the computer calculated and what you are receiving,” Matthews said.

In October 2020, the state caught its mistake, Matthews received nothing for two months. Then they resumed payments at $189 a week, but withheld $95 every week to recoup the overpayment. So she was only getting $94 a week.

Matthews said she filed an appeal in October 2020, and had to resubmit information in July. Her waiver was finally approved in mid-December 2021 and she was paid back the money they withheld.

The PUA Unemployment Overpayment Info Group Matthews runs on Facebook has more than 2,500 members.

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Many share similar stories, as well as fear and frustration. Several people say they applied for waivers in the summer and had them approved in December.

Numerous people said they tried to tell the state the payment amounts were wrong, but ODJFS wouldn’t listen.

“I called weekly for six months and was told time and time again, this was how the Cares Act worked and I just didn’t understand it — but was assured the money was mine,” said Monica Metcalf, who worked at a salon in Genoa that was shut down because of the pandemic. She is now being told she was overpaid $10,000.

“Their system was flawed. And now they are punishing the people who needed assistance, used their system correctly and did everything by their book,” Metcalf said.

Matthews said she knows of several families that were living on $90 a week and still unable to work after the state started garnisheeing their unemployment payments to recoup overpayments. “We were getting kicked while we were down,” she said.

“We didn’t submit fraudulent documents, we submitted exactly what they asked for,” she said. “We didn’t determine the amounts.”

She believes the state should have just issued a blanket waiver for everyone.

Waivers decided based on ‘equity and good conscience’

ODJFS officials say there are various reasons the overpayments occurred, many attributable to the newness of the PUA program.

“A new unemployment system, combined with new computer system to manage it, and historic levels of claims that brought new individuals unfamiliar with unemployment insurance, along with long delays is processing applications, all contributed to the overpayment issue,” said ODJFS spokesman Tom Betti.

Betti said the state follows U.S. Department of Labor guidance when deciding whether to approve waivers. The guidance says repayment can be waived if it wasn’t the applicant’s fault, and requiring repayment “would be contrary to equity and good conscience.”

This latter standard is further, loosely defined by considering things such as whether the person can pay back the money without financial hardship or recovering the funds would be “unconscionable.”

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“The waiver authority is broadly applied,” Betti said. “Individuals who previously repaid overpayments (either by check or by offset) will be reimbursed if the agency approves a waiver.”

In addition to processing overpayment waivers, state officials say they are reimbursing people whose accounts were taken over by fraudsters who intercepted their payments. As of mid-December, ODJFS received 337 requests for repayment from account takeovers, and approved 180 — totaling $348,646 — and denied the rest.

As for the money lost to actual fraud, ODJFS officials say they are working with state and federal law enforcement agencies and bank risk teams to identify and recover stolen funds, and to prevent future fraud attempts.

“While we are unable to share specifics related to ongoing law enforcement investigations and pending seizures, ODJFS will be providing more information on funds recovered as soon as details can be released,” Betti said.


BY THE NUMBERS

$42 million: Total fraud overpayments in Ohio’s traditional unemployment program from the beginning of the pandemic through the third quarter of this year.

$712 million: Total non-fraud overpayments in Ohio’s traditional unemployment program from the beginning of the pandemic through the third quarter of this year.

$454 million: Total fraud overpayments in the Pandemic Unemployment Assistance program -- the temporary program designed for self-employed and other workers who didn’t qualify for traditional unemployment -- from the beginning of the pandemic through October 2021.

$4.2 billion: Total non-fraud overpayments in the PUA program from the beginning of the pandemic through October 2021.

Approximately 155,000: Number of Ohioans who applied for waivers to avoid paying back overpayments.

Over 25,000: number of waivers completed as of Dec. 27. Of these, roughly 13,000 were approved, totaling $72.1 million; another 7,126 were denied, totaling $67.9 million. The remainder were resolved outside the waiver process.

Source: Ohio Department of Job and Family Services.

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