State seeks OK to forgive UI overpayments

Acosta asks Walsh for 'blanket waiver' on all non-fraud benefits


THE BAKER ADMINISTRATION on Thursday asked US Labor Secretary Marty Walsh to intervene and grant Massachusetts permission to forgive wide swaths of overpaid unemployment benefits, warning that state workers will need to process hundreds of thousands of individual applications without federal action.

In the latest step to untangle a messy financial thicket of mistakenly overpaid joblessness aid, Labor and Workforce Development Secretary Rosalin Acosta said past “blanket waivers” the federal government issued did “little to alleviate our continuing issues with overpayments in Massachusetts.”

Acosta on Thursday asked the US Department of Labor to offer another blanket waiver covering all non-fraudulent unemployment benefit overpayments that flowed through four federal programs: Pandemic Unemployment Assistance (PUA), Federal Pandemic Unemployment Compensation (FPUC), Pandemic Emergency Unemployment Compensation (PEUC) and Mixed Earner Unemployment Compensation (MEUC).

She said in a letter to Walsh that changes in federal guidance on employment substantiation made partway through the PUA program served as the “primary driver of the overpayment issue in Massachusetts,” leading to more than $1 billion in overpayment determinations for already paid claims.

“The Department of Unemployment Assistance (DUA) team continues to work to help claimants apply for waivers or appeal overpayments as permitted by law,” Acosta wrote. “Without a blanket waiver option, however, the agency must evaluate on a case-by-case basis potentially more than 300,000 waiver applications. That process is laborious for the agency and can be frustrating for the claimant. Further, requiring claimants to apply for waivers may present obstacles to underserved communities who were particularly hard hit during the pandemic.”

Acosta said that residents who received those federally funded unemployment benefits had already “spent these funds months ago to help preserve their own economic stability,” cautioning that pursuing repayment for improperly high amounts is unlikely to recover much of the funds.

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Chris Lisinski

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She also requested permission to use PUA administrative funding for the state’s regular unemployment insurance program to address staffing needs and an extension of CARES Act staffing flexibility measures to help manage the increased workflow.

During the earlier months of the COVID-19 pandemic, states in some cases paid cash benefits to residents who should have been ineligible or who should have received a smaller amount. In January, the Boston Globe reported that the Bay State overpaid at least $2.7 billion in 2020 and 2021, and Gov. Charlie Baker later said $1.8 billion had been waived for repayment.