After rampant overpayments, Ky. Adopted a debt cancellation plan. Not everyone can apply – 89.3 WFPL News Louisville
Kentucky’s new UI overpayment exemption is supposed to offer some relief to people who have been overpaid in error, but many who owe money are even excluded from the claim.
The state legislature first created the waiver program in March, after the Kentucky Center for Investigative Reporting explained how people who applied for benefits under Public statements by Governor Andy Beshear on eligibility later received notices of debt collection.
Almost a year later Beshear told people to save money on unemployment insurance benefits In the event that the state makes a mistake and demands repayment of that money, the waiver offers debt relief to people who have been overpaid through no fault of their own – and for whom the collection would be “unreasonable, unfair or unfair.” “.
In June, the employment office began sending overpayment waiver requests to those who might be eligible for an overpayment waiver based on their records. Kentucky Labor Cabinet spokesperson Kevin Kinnaird said in an email that the agency had sent just over 14,600 requests so far, allowing the possibility of forgiving more than 19.6 million of excess total debt dollars.
But the office has limited who can apply for debt relief to people the state has predetermined might be eligible – and those people must apply for the relief within 30 days of notification.
The unemployment office has so far approved debt relief for just over a third of those who have received letters. Kentucky-based attorneys and national attorneys say this restrictive approach to overpayment waivers can leave people with debt they shouldn’t have to pay.
No one from the Kentucky Office of Unemployment Insurance was available for an interview on the matter, according to Kinnaird. He said by email that the waivers amounted to nearly $ 7.5 million in canceled debt so far. People who were overpaid but did not get a waiver request have the right to appeal, Kinnaird said, but according to the employment office website, appeals must be filed within 15 days. following the initial decision.
Few options to tackle overpayments
Leonard Sanderson, a substitute teacher for Jefferson County Public Schools, hoped the new waiver would relieve him of nearly $ 1,000 in debt.
Sanderson received unemployment benefits from April through June of last year when the coronavirus pandemic closed schools to in-person teaching and ended the substitute teaching assignments that Sanderson relied on.
The Kentucky Unemployment Office paid him, then retroactively determined that he was not eligible for benefits after the school year was over. The unemployment office said substitute teachers were not supposed to file unemployment claims during summer vacation. Sanderson didn’t know.
A few months earlier, in March 2020, Kentucky extended unemployment insurance to cover independent contractors and substitute teachers. Sanderson would normally collect homework in those months, and on top of that, the state was already paying him. So when Sanderson heard about the new debt forgiveness waiver, he figured it would certainly apply to substitute teachers like him.
Sanderson recalls watching a news briefing on television as a state official saying people would be given a form to fill out and ask for forgiveness.
“Well, I didn’t get that,” Sanderson said. “The only thing I have ever received are two dunning letters. “
Sanderson filed a lawsuit against the unemployment office last December asking a judge to overturn the UI office’s decision that he was not eligible for unemployment benefits. A JCPS spokesperson told KyCIR last year that more than 2,200 jobless claims were filed by JCPS employees and substitute teachers at the time.
He did not receive a waiver request and could not reach the employment office to request one. He is so far unable to ask for a basic pardon and stuck in the “limbos”.
“Priceless on the other side,” Sanderson said.
“Good faith” but no waivers
Unemployment insurance has not even given many substitute teachers, and potentially other workers, the opportunity to seek debt relief, according to Louisville lawyer Robyn Smith.
The State must complete parts of the exemption request first, including how much money the applicant was overpaid, and there are no blank forms online or elsewhere for people to submit their own applications. People requesting a remission through the waiver should then explain why their overpayment was not their fault and that the debt is causing financial hardship for the applicant and their family or that they spent the money. for necessary expenses.
When Smith contacted the Unemployment Office to request a waiver on behalf of a client, she said the Unemployment office said her substitute teachers could not apply for a waiver request for summer payments because he was not it was not a “no-fault” overpayment.
“I don’t see anything that involves a fault,” Smith said. “They did in good faith what your people told them to do. There was no law that told them not to pretend they didn’t know. They haven’t falsified anything. They did not distort anything and they relied on your agency to grant this amount.
And, she says, they are unemployed and have spent this money for a long time.
“If you get them to pay it back, that’s a difficulty, that’s exactly what the waiver is supposed to address,” Smith said.
The statutory application process requires the applicant to apply for a waiver and prove that they meet the criteria for debt cancellation, a process Smith said many people can find confusing.
“You receive this invoice in the mail and you only have 30 days from the date that was sent to you to try to put together a case, using words the lawyers use, to explain why you shouldn’t have to pay it off, ”Smith mentioned. “It is to me the epitome of unreasonable iniquity and injustice, placing this burden on people who are still struggling to get back on their feet.”
Republican State Senator. David Donne de Greensburg, who sponsored the law creating the waiver process, did not respond to a request for comment.
Steve Gray, senior attorney at the National Employment Law Project, a nonprofit advocating for economic security and opportunities for workers, said anyone receiving state benefits should be able to apply for debt relief.
In Michigan, where Gray headed the state’s unemployment insurance office for the first eight months of the pandemic, the office automatically granted waivers to many people who were overpaid due to a agency error.
“If you are looking for the purpose of unemployment laws across the country, it is to relieve the overwhelming force that unemployment exerts on individuals, their families and their communities,” Gray said.
But, Gray said, many states have shifted the focus of UI in recent years from helping as many unemployed people as possible to limiting access to avoid harm. relatively rare cases of fraud or erroneous overpayments.
As a result, unemployment insurance often fails to reach the people who need it most: At the dawn of the coronavirus era, 20% of the unemployed in Kentucky were receiving benefits, which is lower than the national average of 28%.
Gray said the mindset that keeps beneficiary rates low can impact how states implement their waiver programs.
“A lot of states that have waivers in place don’t give a lot of them, even though there are a lot of people who qualify because of that kind of mentality,” Gray said. “It’s ingrained in our system. We just need a complete overhaul.