Repaying an Overpayment of Unemployment Benefits
What Happens If You Were Overpaid Unemployment Compensation
An overpayment of unemployment benefits occurs when you receive unemployment compensation you were not eligible for. What happens if you receive a notice that you have been overpaid, and what can you do?
Overpayment of Unemployment Benefits
You could have been overpaid because of an error or because you claimed benefits you were not entitled to receive. Or, your former employer could have successfully contested your unemployment claim, and the state could have determined that you were not eligible for benefits.
Here’s information on unemployment benefit disqualifications.
In most cases, you will be required to repay the unemployment compensation that was overpaid.
Your state unemployment office will notify you, typically by mail, if you have been overpaid. The notice will explain the reason you are getting the overpayment notice, how much you owe, penalties (if applicable), information on how to appeal, and instructions on repaying the amount you have been overpaid.
How an Overpayment is Repaid
In most cases, you will be asked to repay the overpayment. You may be asked to send a check for the balance of the overpayment. If you can't repay it all once, you may be able to negotiate a payment plan.
Otherwise, the money that was overpaid may be deducted from future unemployment benefits, your paycheck if you are working, lottery winnings and/or tax refunds.
If the overpayment was because of fraud, you might be charged a penalty and/or possibly charged with criminal fraud.
Also, you may be banned from collecting unemployment in the future.
Appeals and Waivers
If you believe the notice is not accurate, you can appeal the decision. If you were overpaid because of an error, you might be able to ask for a waiver to avoid repaying all or some of the amount of benefits you received by mistake.
In most cases, you will have to prove financial hardship to receive a waiver and/or negotiate a payment plan.
Review the Process for Filing an Appeal
Instructions on how to appeal will be listed on your State Unemployment Website. You may be able to file an appeal online, by fax, mail, and in-person or on the phone. Here's more on how to file an unemployment appeal.
This is general information on unemployment overpayment, unemployment compensation, and benefits. Contact your State Unemployment Office for a determination on your specific circumstances and how overpayment is handled your state. State laws vary.
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