“We went from 4,000 to 120,000 filings in a single week,” said Richard Lavers, deputy commissioner of the Department of Employment Security. (Annmarie Timmins | New Hampshire Bulletin)
The New Hampshire Department of Employment Security recently announced it was dropping its effort to collect $25 million in unemployment “overpayments” from 8,000 people who did not, upon review, qualify for benefits.
But those overpayment notices, which are stressful and take months to reverse, have also been going to people who not only did qualify but were underpaid benefits. People like jewelry maker Ron Andrews of Andover.
Prior to the pandemic, Andrews made a living on art show sales and Social Security benefits. After the pandemic canceled her shows, she survived the next 17 weeks on $13,000 in federal pandemic unemployment benefits. She “freaked,” she said, when the weekly payments suddenly stopped and were replaced by frightening demand letters from the state saying she had to repay the money – with interest.
After a six-month wait for an appeal hearing, the Department of Employment Security told Andrews it had erred in ending her unemployment payments and sending the overpayment demand notice. Andrews, the state decided, not only qualified for the $13,000 in benefits, she was owed an additional $11,000 in retroactive benefits. She continues to receive unemployment.
Andrews was able to reverse her penalty with the help of a New Hampshire Legal Assistance attorney, only because she knew to appeal within 14 days.
“People should continue to appeal any unemployment denials or overpayment decisions – especially if they think they were entitled to benefits,” said attorney Mary Krueger, who worked with Andrews on her appeal. She also said anyone still unemployed should continue filing their weekly claims while they wait for their overpayment hearing. In some cases, Krueger said, people could even request ongoing benefits pending appeal.
“Appealing the overpayment decision is often the only way to continue receiving benefits,” she said.
Richard Lavers, deputy commissioner of the state Department of Employment Security, said the overpayment notices, which account for just over 2 percent of all unemployment cases, were born out of good intentions.
When the pandemic triggered a financial and health crisis last year, the state responded quickly. That included the state Department of Employment Security, which now knows moving quickly led to internal errors and, ultimately, having to ask 8,000 people to repay $25 million in unemployment benefits that it shouldn’t have awarded. In these cases, payments were made because of the state’s error, not necessarily a filer’s attempt to defraud the state. Nationally, the Government Accountability Office reported in March that between March 2020 and February 2021, states had identified overpayments of more than $3.6 billion in federal Pandemic Unemployment Assistance.
“We went from 4,000 to 120,000 filings in a single week,” each of which requires review of employment records, Lavers said. “Of course we were trying to move things as quickly as we could. I don’t think that at the time the public would have stood for the department waiting additional weeks or months” to get all the records needed to determine eligibility.
Lavers said the department does not have a count of cases like Andrews’s, where the state’s error was asking for repayment of justly awarded benefits.
New Hampshire Legal Assistance said legal aid requests come in weekly from people who’ve received an overpayment notice. Many end as Andrews’s did.
Attorney Stephanie Bray won an appeal in a similar situation for a client who lost her job when the state closed all non-essential businesses, including her restaurant. The state reversed its $3,000 overpayment demand and awarded her client nearly $11,200 in retroactive benefits for the weeks it had wrongly denied her benefits.
“Someone who files a claim for unemployment is, by definition, financially stressed because they just lost a job,” Bray said. “They struggle with an unfamiliar and stressful system week after week, thinking that they must be doing it correctly because they are receiving benefits. Then one day, they get a notice that they owe the state thousands of dollars. It creates a tidal wave of stress. I talk to people who stop filing claims, even though they need the money, because they don’t want to face that overpayment stress later.”
Lavers recently announced that the department has dropped its effort to reclaim the state’s portion – just 20 percent – of that $25 million in overpayments because they were the department’s fault and not the fault of the filers.
Waiving the federal portion requires a time-intensive, case-by-case review. To do so, the department must determine that requiring repayment would create a financial burden or be “unconscionable,” a standard not defined in the federal rules.
As an example, Lavers said repayment would likely be waived for someone who used their federal unemployment to pay down a credit card debt or put more toward their child’s college tuition.
“I would prefer to deal with those (federal) waivers in a blanket fashion, too,” Lavers told committee members. “But, the U.S. Department of Labor has come back to the states and said we cannot do that. It’s the federal test. We’re required to implement it.”
The arrival of federal pandemic unemployment brought relief but also confusion.
Lavers said his staff had to learn new federal eligibility rules for several kinds of employment almost overnight. Prior to the pandemic, state unemployment was not available to people who were self-employed, did “gig” work, or voluntarily left their job. That changed under federal rules, which said federal unemployment could be awarded to all those groups. Those who voluntarily left the workforce qualified only if they had quit for a COVID-19-related reason, such as caring for someone who was ill or supervising children during remote learning.
There were additional types of federal benefits as well, including the additional $600 a week provided until July for anyone on either state or federal unemployment.
Lavers understands but is not surprised when he hears complaints that staff gave inconsistent answers and information when people called for help filing an unemployment claim. The number of claims spiked so quickly that Lavers’s staff worked the equivalent of an additional 95 positions during the start of the pandemic.
“There were many times I left the office at 9 or 10 o’clock at night and my car wasn’t the only one in the parking lot,” Lavers said. “I’m not looking for anyone to pat us on the back, and we don’t do our work in order to get a thank you from the public. All I’m looking for is that 97 percent of the time, we paid the right dollars, to the right people, in the right amounts.”
Lavers said he’s tried to keep up with the demand by hiring additional people to hear appeals, which have gone from 200 to 500 a month, and handle the nearly 3,300 pieces of “correspondence” that arrive each month. About 30 percent are appeals and the rest includes the 35,000 new unemployment claims the department is getting each week.
Attorney Michael Lewis of Rath, Young and Pignatelli is suing the department on behalf of a 67-year-old client he says has been a victim of the department’s errors and delays. His client, who had to leave work for COVID-related reasons, filed an appeal in December over $4,860 plus interest overpayment demand. They learned Friday that an appeal hearing has been scheduled for June 21. He has returned to work and is no longer filing for unemployment.
“Far from recognizing the plight of New Hampshire’s workforce, and far from operating with caution in the claims it made on New Hampshire citizens, DES sought to increase their pain,” the lawsuit alleges. “As this case demonstrates (the state) opted to turn the screws instead.”
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