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Unemployment Overpayment

     The State of Michigan zealously (and often wrongly) pursues those whom they believe fraudulently or simply incorrectly received unemployment benefits. You must act now to protect your rights and your financial future.

     An experienced and trained attorney can guide you through the often confusing administrative bureaucracy which is trying to impose enormous financial penalties on you.  We can review your case and their claims and act on your behalf to lessen and, in some cases, completely eliminate the repayments and penalties imposed on you. Call us at 248-967-0770 to discuss your matter.

 What is an overpayment of Unemployment Insurance (UI) Benefits?

     Overpayments are benefits paid to a claimant who is later determined not to have been eligible or entitled to those benefits. Because benefits were paid to the claimant before a decision and/or action changed the claimant’s eligibility or entitlement, these benefits must be paid back to the State of Michigan’s Unemployment Insurance Agency, regardless of fault.

     Overpayment of Unemployment Insurance Benefits is governed by Section 62(a) of the Michigan Employment Security Act. The law states that if an unemployed worker receives a benefit payment to which he or she is not entitled, the unemployed worker must repay the Unemployment Insurance Agency the improperly paid amount, plus interest and possibly penalties.

     There are a numerous reasons why the Unemployment Insurance Agency may believe the claimant was issued an overpayment. When the UIA concludes that the overpayment was a result of “an intentional false statement, misrepresentation, or concealment of material information to obtain the [UI] benefits,”  the UIA will issue a finding that the claimant committed fraud and administer penalties on top of the overpayment amount.

     If the overpayment amount is less than $500, the penalty amount will be two times the overpayment amount. If the overpayment amount is more than $500, the penalty amount will be four times the amount. The total restitution amount can, then, total tens of thousands of dollars.

     It needs to be stressed that this determination of fraud carries the same appeal rights as any other repayment determination, and must be appealed in a timely manner.  The penalties for fraud are steep and there are no waiver programs available for restitution amounts due as a result of fraud. Claimants must then bear the burden of paying back tens of thousands of dollars, and the UIA’s collection methods can be severe.

     It really does not take much for the UIA to issue a determination of fraud. The claimant can misunderstand the instructions, not receive a UIA questionnaire, or in some instance, actually be instructed by a UIA agent to not report their earnings. Even though the claimant’s actions are not actually intentional, the UIA may make a determination that the claimant committed fraud.  The results for the unrepresented, unprotected worker can be financially devastating.

     Michigan State’s Benefits Enforcement Unit can use several methods to recover the overpayment such as:

  • Voluntary repayment of overpayments

  • Recoupment from benefit checks

  • Civil suit for a judgment

  • Referral to the Benefit Enforcement Unit

  • Michigan income tax refund intercept

  • Federal income tax refund intercept

  • Wage garnishment (voluntary & involuntary)

  • Property liens

  • Bank account levy

     Additionally, many people are being criminally prosecuted for fraudulently collecting unemployment benefits. In such case your account will be referred to the Attorney General’s Office for criminal prosecution. The consequences for committing fraud include imprisonment, probation, community service, and a monetary fine. The Unemployment Insurance Agency has been increasingly imposing criminal consequences for claimants who are found to have committed fraud.

Call us today at 248-967-0770 to discuss your case and protect your rights.


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