When the COVID-19 pandemic first started and restrictions were forced to lesson the spread of the virus, numerous businesses had no choice but to close temporarily or lay off staff. That led to a huge surge in unemployment claims.
Because states were overloaded with applications for benefits and needed to get that aid out fast, some mistakes were made in the procedure of approving and paying claims. Also, some applicants may have made mistakes on their applications in the middle of all the chaos.
For many months, states have tried to regain the extra money they paid in unemployment benefits. But in May, the Labor Dept. issued new rules saying states could waive the collection of the extra benefits they paid under some circumstances. Now, that list of circumstances is increasing so it does not put an excessive financial hardship on unemployment recipients that might have received more money than they should have.
No penalties for innocent mistakes
The Labor Departments new rules mostly apply to jobless benefits issued under the Pandemic Unemployment Assistance (PUA) program. This program made jobless benefits available to the self-employed and gig workers — groups that normally aren’t approved for any kind of unemployment compensation in the event of job loss.
Now, states can choose to waive the collection of overpayments for some people who received PUA funds because of incorrect answers to screening questions that determine their eligibility for benefits. They can also waive the collection of overpayments in the situations where states themselves miscalculated the total amount of money recipients were suppose to receive.
To be clear, these new rules don’t apply to the situations where overpayments were made because of fraud on the part of the applicants. But the fact that states will not have to go after innocent recipients of extra funds is a good thing.
Though the United States economy is in a much better place than it was at in the first part of the pandemic, many people have not recovered personally from its financial blow. To ask those people to pay back what could be thousands of dollars would for sure put an extreme hardship on them, especially if they do not have money in savings and are still struggling to make ends meet.