$431M in unemployment waivers given to 55,000 overpaid Michigan claimants, UIA says

Beth LeBlanc
The Detroit News

Michigan's Unemployment Insurance Agency said Wednesday it has awarded about $431 million in waivers to about 55,000 claimants who the agency had determined were paid in error. 

But the latest development failed to clarify how many Michigan jobless claimants are still being targeted by the state agency for overpayment and how many are still waiting for federal waivers. The UIA has been beset by controversy for the past two years since it began distributing unemployment aid during the COVID-19 pandemic, resulting in waves of backlogs, fraud and errors. 

As part of Wednesday's announcement, about another $11 million will be refunded to individuals who had begun to pay back the money the agency said they were overpaid. 

Some of those claimants have already been alerted to the return of funds and waivers through their Michigan Web Account Manager accounts, and letters will be mailed in the coming days to confirm the online notices, according to the UIA. 

The UIA still is working to identify additional individuals who may deserve waivers from the overpayment notices they got after receiving federal aid during the pandemic. 

“This is a huge weight lifted off so many Michiganders’ shoulders,” Gov. Gretchen Whitmer said Wednesday in a press release announcing the awarded waivers.

The state sent out more than 648,000 notices in June 2021 alerting residents to four mistaken qualifying criteria for unemployment benefits and asking them to recertify. Whitmer promised waivers to those affected by the state error, but many individuals have remained caught up in bureaucratic red tape attempting to get the promised waivers. 

The agency did not respond to inquiries Wednesday regarding the reason the 55,000 waivers were awarded and how many waivers they expected were still to be awarded. The UIA also failed to respond to a question about whether those waivers listed in the press release overlapped with waivers given last year because of errant eligibility criteria developed by the state.

Unemployment Insurance Agency Director Julia Dale said in a Wednesday release the waiver information was "wonderful news."

"The federal jobless assistance programs were a critical lifeline for many Michiganders affected by the global pandemic, and our action today means they will be able to continue to provide for their families without the fear of having to pay back benefits awarded through agency error,” Dale said.

It is not clear whether the waivers granted stemmed from mistaken eligibility criteria developed by the state, or if it was based on U.S. Department of Labor guidance for expanded waivers issued in February.

That federal guidance appeared to clear thousands of workers who marked they were not "able and available" for work because of the pandemic but were paid unemployment benefits anyway. It also absolved others who received a higher rate of weekly pay than they were supposed to get because of a state error. 

The waivers given apply to some individuals who received unemployment benefits through the pandemic up until Sept. 4, 2021, under the federal CARES Act. The CARES Act programs involved in the waiver program include Pandemic Emergency Unemployment Compensation, Pandemic Unemployment Assistance, Federal Pandemic Unemployment Compensation and Mixed Earnings Unemployment Compensation. 

Amid record high claims during the pandemic, the Unemployment Insurance Agency distributed about $39.8 billion in unemployment aid to Michigan residents from the start of the pandemic through April 30 of this year. That money was distributed to about 3.47 million claimants.

But the distribution of the money was anything but smooth.

The Unemployment Insurance Agency in recent months has been wrestling with how to handle claims in which the recipient was overpaid through agency error or as a result of loose directives attached to federal COVID-19 unemployment programs. 

Thousands of individuals received letters demanding back money — in most cases, long after the money was spent. 

In a class-action lawsuit filed against the state of Michigan in January, wedding photographer Kellie Saunders said she was told in October she owed more than $14,000 to the state because of an error it made in determining her weekly payment amount in April 2020. In the same suit, hospitality worker Erik Varga indicated he was told in January 2021 that he owed $17,000.

The federal government told states, including Michigan, in February that they should expand waivers for potentially thousands of people who were unwittingly caught up in the rushed roll-out of federal unemployment relief during the pandemic. 

The U.S. Department of Labor guidance directed the state unemployment agencies to grant waivers to several categories of individuals, including those who had marked they were not "able and available" for full-time work because they were part-time workers.

Wednesday's announcement came nearly a month after the UIA announced it would temporarily pause new wage garnishments and intercepts of state tax refunds for people accused of being overpaid. 

The agency has requested an extension of the pause, which is set to expire Saturday.