The Michigan Unemployment Insurance Agency is pausing its collection of new wages and interceptions of state tax refunds until next month while thousands of overpayment cases are being reviewed.
The Michigan UIA announced Friday that collections will be paused until at least May 7 for nearly 400,000 cases after the U.S. Department of Labor granted a temporary pause while cases are under review for overpayment. Officials said about 385,000 of those cases involve claimants who were paid using federal pandemic assistance funds, but then were retroactively told they were ineligible for those benefits and must repay them.
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The temporary pause only applies to claimants who received overpayments of federal benefits that were received before unemployment benefits programs under the Coronavirus Aid, Relief, and Economic Security (CARES) Act ended. The UIA is reviewing the cases to identify claimants who may qualify for overpayment waivers.
“A decision on who qualifies for an overpayment waiver is pending while UIA tests its system processes over the next weeks to identify potential recipients,” a press release reads Friday. “Claimants will be notified by letter and through their MIWAM accounts if they are granted an overpayment waiver.”
Officials say the pause will not affect collections activities including “existing wage garnishments, intercepting federal tax returns, deducting a percentage from current unemployment benefit payments, or recovering overpayments for other states.” Collections will still be made on overpayments from before the beginning of the pandemic.
“This pause on collections is one of several steps that will provide relief for many Michigan workers,” UIA Director Julia Dale said. “There will be more good news in the weeks to come for those waiting to hear about overpayment waivers. This is part of my commitment to restore public confidence in the UIA’s ability to efficiently and effectively serve Michigan’s workers and our business community.”
Officials say that claimants who qualify for an overpayment waiver will receive a refund for any money collected so far, or that money will be applied to other outstanding debts. If a waiver does not apply, collections will resume, officials said.
Related: Q&A with new Michigan UIA director: Unemployment claims, frustrations, fraud, more