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Causes, penalties, collection efforts and more...
What is an overpayment on my unemployment insurance account?
Overpayments are benefits paid that you were not entitled to receive. If benefits are paid in error, whether it is your fault or ours, you are required to repay them. If you are overpaid benefits, you a notice will be sent to you. You are responsible for repaying the overpaid amount. If you are not requesting benefits at the time you receive a notice of overpayment, we are willing to set up a payment plan with you to repay the debt in a reasonable period of time. If you do not repay your overpayment it will be recovered by deductions from future benefits, seizing your state tax refund, garnishing your wages, a levy on your bank account, or referral to a collection agency.
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What can cause an overpayment on my unemployment insurance
account?
Overpayments are caused by:
- an appeal decision which finds you ineligible for benefits you have already been paid;
- unreported or misreported earnings;
- misinformation provided by the employer;
- misinformation provided by the applicant.
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What are the penalties for intentionally giving wrong information to obtain unemployment benefit payments?
A monetary penalty of 40% of the total amount overpaid is assessed on all overpayments established as a result of a fraudulent act.
In addition, interest is added to any outstanding overpayment or penalty amount at a rate of 1.5% per month.
Applicants are ineligible for unemployment benefits until the fraud overpayment, including penalties and interest, are paid in full. For example, if you have a standing balance of $5 penalty or interest, you will not receive unemployment benefits even if your weekly benefit amount is $500.
An additional administrative penalty of ineligibility for 13 to104 weeks may be assessed.
Some cases are prosecuted under Minnesota Statutes that provide for prosecution of felony theft which may include penalties of up to a $10,000 fine and/or 10 years in jail.
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Can the 40% monetary penalty and interest be deducted from future unemployment benefits?
No, under Federal Unemployment Statute, the 40% penalty and interest cannot be offset through your unemployment benefits. Also, under Minnesota Law, if an applicant has a penalty or interest balance at the beginning of a week, he/she is ineligible to receive benefits and no payment would be authorized from which to offset the overpayment balance.
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How do I report an individual who may be collecting unemployment benefits and working at the same time?
You can help prevent fraud by reporting potential violations to the Unemployment Insurance (UI) Program using the online Fraud Report.
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What if someone else uses my Password to collect benefits from my account?
You are responsible for all unemployment benefits paid on your account using your Password. You should never share your Password with anyone-even a department representative. Should someone else use your Password to collect your unemployment benefits, you are responsible for repaying the benefits as well as being the subject of any penalties.
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Why does the total overpayment amount include the money that was withheld for child support, state tax withholding and federal tax withholding?
Even though you did not receive the money withheld, you are considered to be overpaid the entire amount because payments withheld are paid on your behalf to fulfill your present (child support) or future (tax withholding) obligations.
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What collection efforts will be used to recover a non-fraud overpayment?
Collection efforts used to recover non-fraud overpayments include:
- Deductions from future benefits payable (100% of weekly benefit amount until overpayment is totally recovered) if the overpayment is caused by failure to report deductible earnings or deductible payments.
- Establishing a department approved payment plan for full repayment.
- Intercepting any Minnesota State Tax refund, property tax credit, or rent credit by filing claims with the Minnesota Department of Revenue under the Revenue Recapture Act.
- Garnishment of earnings from an individual's employer.
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What collection efforts will be used to recover a fraudulent overpayment?
Collection efforts used to recover fraudulent overpayments include:
- All of the above non-fraud overpayment collection efforts and;
- Court ordered restitution after felony prosecution by the County Attorney.
- Referral to the Department of Revenue Collection Division or an outside collection agency. This recourse adds collection costs of 17% of the total debt.
- Filing a lien against the overpaid individuals’ non exempt assets which could also adversely affect the individual's credit rating.
- Seize the money from the overpaid individual's bank account.
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Why are some overpayments offset at 50% of unemployment weeks requested and others offset at 100% of unemployment weeks requested?
Provided fraud is not involved, overpayment amounts due to unreported earnings are offset at 100%. All other non-fraud overpayments are offset at 50% of the weekly benefit.
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Why do you continue to send me billing statements if the issue that caused my overpayment is under appeal?
Under Minnesota law, there is no waiver of overpayments on unemployment insurance. We will continue to send monthly billing statements pending the outcome of your appeal.
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Can my overpayment be waived if I am having financial difficulties?
Under Minnesota Law, there is no waiver of overpayments on unemployment insurance. If you move to a different location, you will need to update your address as we will continue to send monthly billing statements until the overpayment is resolved.
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