Updated Feb. 25 at 7:18am
The leader of the state’s Executive Office of Labor and Workforce Development is asking for permission from the federal government to waive a slew of unemployment overpayment claims impacting hundreds of thousands of Massachusetts residents.
Secretary Rosalin Acosta sent a letter to U.S. Department of Labor Secretary Marty Walsh on Thursday, saying the biggest chunk of overpayments were caused by the federal government changing rules midway through the program. The change affected more than $1 billion in already-paid claims, and resulted in some residents receiving letters that they had been overpaid when, in fact, they just hadn’t complied with new documentation standards. Acosta requested a waiver from Walsh to provide relief to people who had received notices by allowing the state to waive the overpayments.
Acosta said her agency is helping claimants apply for individual waivers or appeal overpayments.
“Without a blanket waiver option, however, the agency must evaluate on a case-by-case basis potentially more than 300,000 waiver applications,” she said, calling the process “laborious” and “frustrating” for claimants.
While the changes in documentation standards were meant to address fraud issues that had developed within the pandemic assistant program, one “unintended result,” Acosta said, was legitimate claimants being told they were overpaid.
The state’s Department of Unemployment Insurance overpaid at least $2.7 billion on more than 719,000 unemployment claims in 2020 and 2021, according to a recent study. This resulted in many residents panicking over having to suddenly repay large unanticipated sums — for some in the tens of thousands of dollars.
Sen. Patricia Jehlen and Rep. Josh Cutler, who co-chair the legislature’s labor committee, recently asked Acosta to pause collection for non-fault overpayments from residents until the end of July.
The pause, they said, would ensure legislators and “partners in Washington” would have time to find a fix.
On Feb. 15, Acosta said collections have mostly stopped, unless someone has voluntarily entered into a repayment plan, pays in full or if the agency partially offsets future benefits if the claimant re-enters the unemployment system.
However, she said that the DUA is required by state law and the Department of Labor to assess and recoup “finalized overpayments.”
Jehlen appeared to agree with Acosta’s effort on Thursday.
“I hope that Sec. Walsh grants this very reasonable request, which will reduce bureaucracy and save administrative costs, and most importantly keep money in the hands of people who needed help, spent the money and did nothing wrong,” she told GBH News.
“We should not forget about the 171,000 people with state overpayment amounts, where we in state government need to act,” Jehlen added.
Cutler told GBH News that the waiver request is "a positive step."
The Department of Labor confirmed Thursday night that they had received the letter and are reviewing it.
The state implemented the pandemic unemployment program based off of 2020 Department of Labor guidance announcing the relief to families impacted by COVID-19.
