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Colorado to write off some of overpaid unemployment benefits, officials say

colorado unemployment website
Posted at 4:02 PM, Oct 08, 2020
and last updated 2021-01-05 20:53:45-05

DENVER – Some Coloradans who received overpayments for unemployment benefits could possibly see them written off, state Labor and Employment officials said Thursday.

In recent weeks, hundreds of Coloradans have received notice from the Colorado Department of Labor and Employment that they were overpaid unemployment benefits and would have to pay them back, which has led to strife and anxiety among some recipients, many of whom are still struggling to make ends meet during the pandemic and recession.

A Littleton couple whom Denver7 spoke with earlier this week is facing having to repay thousands of dollars in unemployment they received earlier this year.

CDLE officials said earlier this week that what led to the overpayments was a mix of both human error and the state’s rush to implement the federal Pandemic Unemployment Assistance benefit for gig workers, self-employed workers and independent contractors once the money from the CARES Act became available.

They expounded on that during a weekly press call Thursday.

Officials said they had identified about 9,000 Pandemic Unemployment Assistance benefit recipients – mostly gig workers and self-employed people – who could see about $1.4 million in overpayments written off because the overpayment was not their fault, or they demonstrated they are experiencing financial hardships.

CDLE Deputy Executive Director Cher Haavind said Thursday that a study group discovered confusion among some of those filing for PUA benefits in how they reported their wages, which led to the overpayments. PUA is a new system for unemployment benefits for people who would not typically qualify for regular unemployment benefits, and officials said that the confusion among gig workers on which earnings to report led to the bulk of the overpayments.

“The department does have the ability to either have a write-off or a waiver,” Haavind said. “If the claimant indicates to us that the offset was a result of this misunderstanding of the process, or that it provides a financial hardship, then that will be considered under a write-off,” Haavind said.

The study group decided to amend the form that claimants need to fill out making clear which wages they should be reporting where, which will be launched on Oct. 29.

Aside from a write-off, people who were overpaid may also file an appeal in a window that has been extended from 20 to 180 days to account for those overpaid in the spring, and the state would be able to reconsider the overpayment.

People who have to repay the money can request a payback schedule to determine how much they will pay back and when, or could have some of the overpayment taken out from future benefits.

CDLE officials said overpayment was common with regular unemployment if people misrepresent their adjusted earnings, if employers balk at benefits, or because of fraud, which led to about $40 million in PUA overpayments in Colorado earlier this year.