Some MA Residents Will NOT See A Full Refund From Uncle Sam!
For 112,000 Massachusetts residents who were overpaid unemployment benefits within the past few years, be aware: the state is coming to collect. Why you ask? The answer is best described in one word: Overpayment.
This is not an unusual for those who collect unemployment. Statistics show about 2% of all unemployment payments, or roughly $30 million, were overpayments in Massachusetts in 2019, as per the state’s Department of Unemployment Assistance. But you can also call The COVID-19 pandemic a prime suspect in this whirlwind mess that is plaguing The State House in Boston and now the end result will trickle down to those who depend on every penny to survive these tough times plus short-term federal programs that have been rapidly built, executed and shuttered made the money owed at a magnitude that’s anything but normal. In one word: Ludicrous!
Another culprit included administrative errors, fraud and confusion about who qualified for new, short-term federal programs which led to billions of dollars being overpaid. After years of forgiveness efforts slowly whittled down that sum, the department is now trying to get $719 million back from taxpayers on this year’s tax refunds. And this is NOT cheap as this is an expensive end result as those112,000 claimants owe, on average, $6,400 to the federal and state government. The alternative: Any tax refunds that would be given to a claimant will be put toward paying down their debt to the unemployment overpayments. An expensive tab if you ask me.
Massachusetts’ Secretary of Labor, Lauren Jones did NOT have any encouraging words in this matter:
“There has been tremendous outreach that has been done to date, especially through a campaign last year, to reach as many claimants as possible,”
But this STILL won’t put an end to the multiyear problem. There are tens of thousands more people whose money isn’t being taken out of their tax refunds this year, but the state plans to recoup their money, so their time will eventually come as the pandemic continues to create a "powder keg" of problems.
Overnight shutdowns during the height of COVID-19 in 2020 created a sudden need that the State’s Department of Unemployment Assistance tried to fill, with help from new federal programs. The amount of money distributed 3 years ago, a total of $21 billion, was 15 times more than what it gave out in 2019 as two-thirds of these overpayments were tied to federal pandemic programs.
Rory MacAneney is an employment attorney at Community Legal Aid. He tried to put this precarious predicament into perspective:.
“You’ve got the combination of: state workforce agencies aren’t able to work in person, they don’t have all their usual facilities, they are trying to learn how to do things remotely. They’re facing a huge increase in the number of people who are applying for regular unemployment. And on top of that now, they’re also getting people who are applying for these pandemic programs, and each of the federal pandemic programs had its own sort of guidance.”
It is rule of thumb that state Governments often take back unemployment overpayments through tax intercepts. But it’s unusual for governments to be coming to collect years later. It’s only happening now because of a multiyear pause during the pandemic as these overpayments date back to 2015 and they are just finding out about this disturbing news that would put a crimp on their financial woes.
The 112,000 claimants whose tax refunds will be intercepted this year, if they’re not in the process of applying for a waiver, are the group that’s been extensively narrowed down and been contacted several times by the department. Now The State House is trying to put the blame on the working class as they did NOT take action to claim a one click waiver program that the Department of Unemployment Assistance has provided,”
They won’t have it taken out of their tax refunds as the state conducts more outreach to figure out repayment plans. Anyone affected by this inconvenience can fill out a form by logging on to the state's web site.
Employment lawyers suggest that anyone who is facing a debt to the state applies for what’s commonly called a “hardship waiver,” which could wipe the balance they owe if their expenses are more than they’re earning or if they meet other criteria. Some hope that the state will opt to forgive more of the money that’s owed. in one word: PRAY!
State Senator Lydia Edwards sees payments from the early days of the pandemic as a crucial tool that helped workers and businesses stay stable during a tumultuous time.as she has a light at the end of this dark tunnel by proposing a bill that would give the Department of Unemployment Assistance the power to waive any overpayments for “non-fault” cases: In other words, the applicant was NOT at fault.
“What I find abhorrent is that when there were true mistakes made — the person didn’t do this, didn’t try to defraud the government — they’re now being stuck with some bills I’ve heard as high as $50,000 to pay back the unemployment,” she said, saying such forgiveness would be similar to the government forgiving PPP loans"
BOTTOM LINE: Boston NEEDS to remedy this dilemma as this will affect the livelihoods of many state residents will continue to struggle financially. This has to STOP!!
(Some information obtained in this article courtesy of www.wgbh.org)
LOOK: The 25 least expensive states to live in