The agreement contains several provisions. The state’s Unemployment Insurance Agency, or UIA, must pay about $55 million to claimants. It will also, for the first time in years, be permitted to resume collection efforts against applicants who committed fraud or were otherwise overpaid.
Michigan has agreed to pay $55 million to pandemic-era unemployment claimants who were approved for benefits, but later told that they had been overpaid and were required to refund the state.
According to The Detroit Free Press, the settlement was approved earlier this week by Michigan Court of Claims Judge Brock Swartzle.
The agreement contains several provisions. The state’s Unemployment Insurance Agency, or UIA, must pay about $55 million to claimants. It will also, for the first time in years, be permitted to resume collection efforts against applicants who committed fraud or were otherwise overpaid.
The Free Press notes that, after legal fees and other costs have been deducted, the settlement will provide approximately $34 million in compensation to the 23,212 eligible class members. Furthermore, the UIA must set aside $1.1 million as a reserve fund for applicants who were unable to file a timely claim.
Earlier this year, when a tentative settlement was first reached, some affected Michiganders shared their stories of receiving unexpected overpayment and demand letters from the Unemployment Insurance Agency.
Lisa Shepherd, a Branch County resident, told WWMT that she applied for pandemic-related unemployment benefits in May 2020. She received benefits for months, but, in August 2020, received a notice stating that she was ineligible for unemployment compensation and must repay more than $4,000.
Shepherd said that, sometime later, she received another letter informing her that she owed another $3,000.
“They just continued to send collection letters,” she told WWMT. “They intercepted my state tax refund, and then it just rolled from there.”
Shepherd said she eventually got her money back, but it took more than a year to accomplish.
“I think the only thing worse than dealing with a global pandemic was being failed by the system that was supposed to help you,” she said.
In a statement, the Michigan Unemployment Insurance Agency said that, with the injunction against collections lifted, “claimants who were paid more benefits than they were entitled to receive on regular or pandemic claims may now be required to pay back the funds.”
“UIA will work to understand the full implications of the court’s order to end the collections pause and determine the best path forward,” an agency spokesperson said. “When the time comes, UIA is committed to issuing clear guidance to the public outlining next steps and expectations for those asked to repay benefits they were not entitled to receive.”
However, the UIA said, even with the injunction lifted, it will not attempt to collect overpayments until claimants have exhausted all available opportunities for protest and appeal. In some cases, claimants may be able to request waivers for hardship, administrative errors, and wage reporting errors.
Sources
Michigan court OKs $55M settlement in pandemic-era unemployment benefits lawsuit
Michigan workers to receive $55M in UIA settlement approval. Years-long lawsuit brings improved service, procedures
Waste Watch: Michigan Unemployment Insurance Agency pays out $55M in lawsuit
