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NC unemployment overpayment notices surprise, upset residents

Updated: Feb. 1, 2021 at 11:19 AM EST
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NEW HANOVER COUNTY, N.C. (WECT) - Months after she first applied for benefits, Ellen O’Malley got her first unemployment check. Almost immediately, she received a notice in the mail from the Department of Employment Security (DES) that she’d been overpaid. The displaced library worker was confused, since she’d turned in all the required paperwork, and was notified she was qualified and approved for unemployment assistance.

“It think the most frustrating thing is that you can’t talk to a person,” O’Malley said about the confusing process of applying and receiving benefits, only to have them revoked. “I realize they are overwhelmed, there’s a lot of people [applying], but when you get someone on the phone and they say, ‘Yes, it’s fine,’ and then you have this money. Then two weeks later, they say ‘No, you don’t.’”

O’Malley said she managed to get someone on the phone during the application process, but can’t get through now that she’s gotten notice of overpayment. The state has begun recouping the money they say O’Malley owes them by cutting her current benefit checks in half. Other viewers, ranging from substitute teachers to hairdressers, have also contacted WECT upset that they’re being asked to repay thousands they received while out of work due to the pandemic. The latest numbers indicate that, overall, the state overpaid North Carolinians $70 million dollars in unemployment benefits.

“Federal dollars come with strings sometimes, and we have to be good stewards of it. You can’t just allow fraud to happen,” State Representative Deb Butler told WECT of the attempts to recoup overpayments. “So if people have made fraudulent claims, they’re going to have to pay that money back. If however, you are one of the vast majority who just tried to navigate a difficult system, and you didn’t do it correctly for whatever reason, I think there’s an appetite in the legislature for some grace and some amnesty for those types of people...as there should be...It is wildly confusing.”

Of the $70 million in overpayments across the state, officials estimate only $7-8 million was due to fraud. The rest seems to involve honest mistakes by applicants for unemployment, many of whom had never been out of work before or needed to file for assistance. It’s also possible state workers made errors calculating benefits for people who had lost their jobs, contributing to the overpayments.

O’Malley said the overpayment notice she got from DES wasn’t entirely clear on what grounds they determined she was overpaid. She took the job as a part-time librarian here after retiring from Massachusetts. She said part of the issue stemmed from confusion over her out-of-state pension checks (she says unemployment officials told her she still qualified because the pension check didn’t come from North Carolina). Another issue surrounds payments she received after returning to work with more limited hours. O’Malley said she fully documented the reduced hours on her application, and simply cashed the checks the state sent her.

North Carolina is now asking O’Malley to repay about $6,000 of the $10,000 they paid her over the last year. She said that money has already been spent to help cover expenses incurred after her paycheck was cut significantly.

“It’s just stressful because I just feel like I have this bill hanging over my head of $6,000,” O’Malley explained. “You spend this money and then you’re like, ‘Where am I going to find this money to pay it back?’”

For people who received unemployment overpayments while acting in good faith, North Carolina DES sometimes grants waivers so the money does not have to be repaid. But those waivers must be applied for and approved. While no formal action has been taken yet, state lawmakers on both sides of the aisle have indicated their willingness to be generous with the overpayment waivers under the circumstances.

“For those people that made good faith errors, I am hopeful that we can implement some kind of amnesty or grace for those people. These are unprecedented times....we need to show people some courtesy...and let’s face it, the money went into the economy and we desperately needed that,” Rep. Butler said.

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