The Colorado unemployment division is prepared to write-off up to $1.4 million it erroneously overpaid people through the federally funded Pandemic Unemployment Assistance program.
The program, known as PUA, was launched in a hurry in Colorado this spring after Congress passed the CARES Act. PUA allows self-employed people, independent contractors and gig workers such as Uber and Lyft drivers who are not eligible for state support to collect unemployment benefits.
Under an executive order from Gov. Jared Polis to rush money into the hands of people who needed it as the COVID-19 pandemic cratered the economy, the Colorado Department of Labor and Employment started paying people through the program without vetting their paperwork and eligibility upfront, officials say.
As a result, 9,098 people approved for PUA received more in weekly benefits than they should have, according to the labor department. The overpayments were discovered as state officials delved deeper into applicants’ paperwork and tax documents. Those 9,098 cases have added up to $1.4 million — about $154 on average— that he state overpaid. Now, the state is looking to either reclaim the overpayments or write them off state’s books.
The labor department clawback efforts have come in the form of “offsets” where it withholds 50% of a person’s benefits to collect the overpayment total. For people no longer collecting PUA benefits, the state is sending them notices with repayment options, Cher Haavind, the labor department’s deputy executive director, said.
As of last week, the labor department has frozen efforts to collect on those balances, Haavind announced. On Oct. 28, all remaining balances tied to the issue will be written off. In the meantime, the labor department is encouraging people to check the correspondence tab in their online account for information about overpayments and appeals. Even people who have paid back money owed can appeal in an attempt to reclaim an overpayment.
Haavind said the overpayments are largely due to paperwork errors, particularly among gig workers who may not be familiar with specific tax figures the state’s enrollment form asked for. The state is working on a more clear form for future enrollees.
“What we’ve realized in the recent weeks is there some confusion particularly among the gig worker population about requirements with regards to reporting wages,” Haavind said. “If the claimant indicates to us that the offset was a result of a misunderstanding of the process or that it provides a financial hardship, then that will be considered under a write-off.”
Colorado Public Radio first reported on the issue last week, interviewing an Uber driver who has been notified he owes $6,000 in overpaid benefits.
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Source:: The Denver Post – Business