NJ Overpaid Unemployment Benefits. Will You Have to Pay it Back?
As many as 250,000 New Jersey residents who received pandemic unemployment benefits could be deemed ineligible and ordered to pay the money back.
Letters have already gone out to about 130,000 workers, and more are on the way.
The reason is due to a change in rules after many were already receiving benefits.
When Congress passed sweeping federal COVID relief legislation for the jobless, they included many not typically eligible for unemployment relief.
Those who worked as independent contractors, freelancers, and so-called gig-workers were allowed to collect benefits, even if they could not fully document the sources of their income.
However, congress then tightened the reporting rules and how people needed to certify their wages. As a result, a good number of these workers were deemed ineligible.
New Jersey State Labor Commissioner Robert Asaro-Angelo is asking Congress to waive the overpayments, and allow states to tell these workers they can keep the money.
In a letter to House and Senate leadership, Asaro-Angelo says the money paid out has already been spent "on necessities like food and housing."
"To try to recover these funds after the fact stresses these workers and their families," Asaro-Angelo wrote, "And is counterintuitive to our mission of helping people in their time of need."
As a result of numerous changes in guidance from the U.S. Department of Labor since the original passage of the CARES Act, in addition to the eligibility changes brought about in the Continued Assistance Act, many individuals who received pandemic UI assistance are now seeing their benefits changed to overpayments – requiring them to repay these funds, which they received through no fault of their own. - NASWA Letter on Pandemic UI Requests
If congress does not grant the waiver, New Jersey will have to try and collect the money paid in error, something the commissioner does not think will be done with much success.
"The likelihood of recovering these funds is low," the letter states, "And the cost of states’ efforts to secure repayment far outweighs any monetary returns."
If a person refuses, or cannot repay the money, they will not be eligible for jobless benefits in the future until their account is settled.