Gov. Beshear: Save Money From Unemployment For Debt Overpayment

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During the daily coronavirus briefing on Monday, Gov. Andy Beshear acknowledged that Kentucky had mistakenly paid people who applied for unemployment benefits – and advised recipients to save that money if they are notified of a investigation, as the state could possibly request it in return.

“We are obviously asking people to save this money,” Beshear said while in quarantine at the the governor’s mansion.

As the pandemic spreads, many Kentuckians who have received unemployment insurance benefits learn that the employment office has ruled them, retroactively, ineligible. As KyCIR reported last week, many filed their unemployment claims after Beshear said his administration was extending coverage to people who feared catching the virus at work – only to be disqualified months later because the state said they took a “voluntary leave”.

[READ: Gov. Beshear Offered ‘Self-Quarantine’ Unemployment. Now State Is Backtracking — And Billing]

People who owe overpayment debts to state and federal unemployment agencies may be forced into a payment plan, face civil lawsuits, or have future benefits tied up to pay off the debt.

Beshear said the state will eventually deal with the overpayment issue, but the state’s top priority right now is to resolve the issue. 90,000 unemployment claims that have been deposited but have not been processed.

In the meantime, Beshear said people who believe they’ve been overpaid should monitor their emails for an overpayment notice and save the money they’ve received.

Beshear said the state would eventually fix the overpayment issue.

“People who believe they are overpaid should wait for an overpayment determination before paying back,” Beshear said. “Applicants should monitor their email for overpayment notices because the appeal period is limited. Claimants have 15 days to appeal when notified of an overpayment.

Other states are also recovering unemployment overpayments, as Beshear noted on Monday, but the Kentucky unemployment office has been particularly harassed in its response to the pandemic. In May, the state fired its newly installed UI director at a time when no state had a greater share of its unemployed workforce than Kentucky. The system required an $ 865 million loan from the federal government in June to bolster the UI trust fund.

KyCIR reported in August that the Kentucky Unemployment Office had violated federal rules by automatically approving self-employed workers or independent contractors who applied for unemployment, likely creating overpayments like those addressed by Beshear on Monday. Kentucky has entered into a corrective action plan with the federal Department of Labor that includes pursuing overpayment debts that arise from the state’s mismanagement of unemployment claims.

Beshear’s office previously reported to KyCIR overpayments for people who self-quarantined for reasonable fear of catching COVID-19 on the job were the result of shifting federal government policies.

A spokesperson for the Ministry of Labor, however, said in a statement that the guidance referred to by the governor’s office “did not change any policy, but clarified operational guidance based on state issues.”

Kevin Kinnaird, information specialist at the Kentucky Labor Cabinet, said the direction of the federal government has in fact changed.

“Whether you call it a change or a clarification, the position of the Department of Labor has changed,” Kinnaird said in an email response to the federal government’s claim.

State disagrees with tightening eligibility amid pandemic and global recession as millions struggle, and Kentucky to join others States to ask for flexibility to forgo overpayments for Kentuckians who self-quarantine during this pandemic to protect their health or reduce the exposure of a higher-risk loved one, ”Kinniard said.

Most states allow their respective unemployment agencies to waive overpaid debts when the claimant is not at fault. Kentucky is one of the only 10 states without such a provision in state law.

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