House orders awareness campaign on UI overpayments

Boston Statehouse

BOSTON, Mass. (State House News Service)– As the state works to claw back hundreds of millions of dollars in overpaid unemployment benefits from the COVID-19 pandemic, House Democrats slipped a provision into their federal relief spending bill that would require the Baker administration to notify and make to clear to recipients that they may qualify for a waiver from repayment.

The public awareness campaign spelled out in the House’s plan to spend American Rescue Plan Act funds falls short of the expansion of waivers sought by Rep. Joan Meschino and other advocates, but the Hull Democrat saw it as progress. “I just took the inclusion of the workforce piece as real recognition that this is an issue and we need to be thoughtful about how we approach the waiver process, so I was actually really pleased,” Meschino said.

Meschino, who filed the amendment to the ARPA bill, has also filed legislation that would expand the availability of waivers to clearly include anyone who received pandemic unemployment assistance and through no fault of their own accepted and spent excess benefits to meet ordinary living expenses.

Those waivers, under the lawmaker’s proposal, would not apply to cases involving fraud, and supporters say it would relieve the anxiety some families are feeling as they struggle to figure out how to repay benefits they already spent on food, rent and other necessities.

Meschino filed the bill in late September based on constituent cases handled by her office, and attempted to insert the policy change into ARPA bill that the House passed last week. Having just had a hearing in October, Meschino said she would continue to work with the chairs of the Labor and Workforce Development Committee to try to move the additional pieces forward. “The public awareness campaign was a super important, great piece for them to include,” Meschino said.

The House bill directs the Department of Unemployment Assistance to provide notice and promote awareness of the availability of overpayment waivers related to benefits received in 2020 and 2021. The department would be required to provide notice to all recipients of benefits under the state and federal UI expansion programs put in place during the COVID-19 public health emergency, and must include information about both eligibility and how to apply.

The Executive Office of Labor and Workforce Development and the Department of Unemployment Assistance has not provided any information on the scope of overpayments or its efforts to collect the money. The administration also did not comment when asked about its position toward Meschino’s bill or the amendment added to the House ARPA plan.

Greater Boston Legal Services, using Department of Labor data, has estimated that the total value of overpayments could be between $1.58 billion and $1.92 billion, with $531 million of that coming from state dollars and the rest from federal benefits programs that would be returned to the federal government once recouped.

Advocates this week said their attention will now shift to the Senate where they will try to get the full waiver proposal included in that branch’s version of the ARPA and surplus spending bill, which is expected to be released on Wednesday and debated next week.

If it is not included in the initial Senate Ways and Means bill, Meschino said she had not yet identified a Senate partner to work with to file an amendment, but hopes to at least get the same language included so it does not become part of House-Senate conference negotiations.

The House and Senate have already agreed as part of the process to allocate the state’s ARPA money to put $500 million toward paying down the long-term unemployment insurance liability of businesses, which grew to as much as $7 billion over the course of the pandemic as businesses were closed and people cast out of work.

Gov. Charlie Baker proposed to use $1 billion from the state’s fiscal 2021 tax surplus for the same purpose, and business groups have criticized the House and Senate’s smaller allocation as potentially insufficient to even cover the cost of overpayments.

Christopher Carlozzi, Massachusetts director of the National Federation of Independent Business, said the House bill provides “only a fraction of what is necessary to help pay down the $7 billion in UI debt that was a direct result of state-ordered shutdowns and restrictions.”

“Making matters worse, legislators further strained the fund by allowing waivers for UI overpayments. This will be an additional expense paid by employers and the unknown price tag may end up negating the $500 million of UI relief provided in this package,” Carlozzi said.

Greater Boston Legal Services estimates that about 72 percent of overpayments would be federal dollars that do not get returned to the state’s UI trust fund. The organization also said “non-reimbursable employers” are not held responsible for overpayments, while “reimbursable” employers are not on the hook for any federal benefits and were provided relief on state contributions of up to 50 percent through the CARES Act and 75 percent through ARPA.

Reimbursable employers are mostly nonprofits that only pay into the system on a month-to-month basis when an employee accesses benefits. Even without expanded waiver eligibility, Jason Salgado, of GBLS, said the agency believes many claimants, particularly those who worked for nonprofits, would be eligible for a waiver under existing law, and need to be made aware of their rights.

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