In its most-detailed public accounting of unemployment insurance overpayments, the state said it had nearly 29,000 pending requests for waivers from Massachusetts workers who were later found to be ineligible for benefits or got bigger checks than they should have.
The majority of waiver requests are related to pandemic programs paid for by Congress, according to a report by the Department of Unemployment Assistance sent to the state Legislature this week. Waivers are being sought on about 8 percent of the 352,000 overpayment cases on the DUA’s books.
Outstanding overpayments total $2.33 billion, 77 percent of which are tied to federal benefits, including Pandemic Unemployment Assistance for the self-employed and gig workers. The state’s unemployment trust fund, financed by taxes on employers, is on the hook for about $375 million.
As part of legislation passed by Congress in December 2020, the DUA was required to obtain documented proof of prior employment from recipients of Pandemic Unemployment Assistance. Initially, those people were able to self-certify their eligibility. The change resulted in hundreds of thousands of overpayment notices.
The Baker administration sent a letter last week seeking US Labor Department approval to drop its efforts to recover overpayments on Pandemic Unemployment Assistance. The request, the first of its kind by any state, covers overpayments that didn’t result from fraud or intentional mistakes by recipients.
The DUA report also laid out how many waivers it has approved: 17,250, or 92 percent, for federal programs, and 490, or 35 percent, for primarily state unemployment, though that tally includes some recipients who received federal dollars.
Based on current trends, the DUA said the expected recovery rate for state and federal overpayments is 12 percent. That excludes overpayments caused by identity verification issues, which the department said were largely caused by fraud. When identity verification cases are included, the expected recovery rate drops to 5.4 percent for state unemployment and 10 percent for the federal program.
The DUA has more than 26,000 appeals pending from claimants challenging its decisions on eligibility and overpayment denials. If appeals are denied, people can seek a waiver.
The agency said that since March 2020 it has resolved about $1.8 billion in overpayments.