Federal Waivers Will Help Thousands in Illinois Who Were Told to Pay Back Excess Unemployment Benefits

Natalie Frank, Ph.D.

Many people in Illinois who were overpaid unemployment benefits through no fault of their own then told they’d have to pay it back will be able to receive a federal waiver.

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Thousands of unemployed people in Illinois were overpaid unemployment benefits and then told to pay the money back to the state, leading to a lot of panicked people. Now, finally, federal money will fix a mistake Illinois should not have made in the first place.

Over 40,000 gig workers or self-employed workers in Illinois who filed claims for Pandemic Unemployment Assistance received a questionnaire from the Illinois Department of Employment Security (IDES). IDES is calling this questionnaire the first step for claimants to take in order to request a waiver that might prevent them from being required to pay back overpayments that they weren’t aware they were getting.

People who have spoken out about the mistakes that were made at the state level have said that they assumed IDES had calculated the appropriate amount of assistance for them to receive. They didn’t feel that they should know how to determine how much unemployment was appropriate for them to get and so they never questioned the amount.

Those initially told they would have to pay the money back were extremely stressed since there was no official word or determination as to whether there was anything they could do about it. Many filed appeals but received no response and most hoped that the federal COVID-19 relief bill allowing states to waive PUA repayments in certain cases would allow for overpayments to be forgiven. However, waiving PUA overpayments was optional, and there was the fear that Illinois would decide not to do it.

Now, however, overpayment waivers, in cases where it was not the person’s fault they were overpaid benefits, have been made possible through federal relief.

IDES has issued this statement about the situation:

“IDES has begun to make determinations on PUA recovery of overpayment waivers, beginning the week of March 18. As of March 26, roughly 47,000 PUA claimants have requested a waiver of recovery of overpayment, and nearly 6,000 determinations have been made. The Department is making determinations on a case-by-case basis, as required by federal law. IDES is continuing to work to remove overpayments and issue refunds as appropriate to claimants who have been approved for an overpayment. Information will be provided to claimants who have requested a PUA overpayment waiver, and they should continue to monitor their claim for activity related to the overpayment waiver.”

According to IDES, so far about 6,000 letters have gone out saying that the recipients have been approved for the waiver. They have approximately 41,000 more people to get to as they make case by case decisions, which they say is a federal requirement.

Although Chicago residents who had been worried about being required to pay back money they didn’t have were relieved over the possibility of a waiver, at least one Illinois representative doesn’t think this action is good enough.

Illinois State Rep. Lindsey LaPointe (D-Chicago) has criticisms about how IDES is handling this situation. She believes that making claimants do paperwork, then wait possibly months, isn’t fair to the tens of thousands of people who have already been suffering over concern or real financial hardship caused by the mistakes. In particular, for those who had money taken from subsequent unemployment claims, had their unemployment cut off and/or had money confiscated from their tax returns, LaPointe feels the State should taking more responsibility for fixing the problem. At least for now, she says, it isn’t.

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Ill State Rep. Lapointe says state should be proactive

“If IDES made a mistake, we should be remedying that as efficiently as we can,” LaPointe said.

LaPointe said the state could be reaching out directly to those they already know were overpaid, which LaPointe called the proactive option.

“IDES is putting a paperwork mechanism in place to start the process of a claimant requesting their overpayment to be waived,” LaPointe said. “That’s not necessary.”

The state does not yet have a total of how much they expect to pay back overall.

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