Copyright © 2021 Albuquerque Journal
For some New Mexicans, unemployment benefits designed to be a life raft can end up feeling more like a millstone if the state Department of Workforce Solutions determines they’ve been overpaid.
And Workforce Solutions has done just that, many times over.
The department sent 24,872 letters from the middle of March through the end of 2020 informing recipients of the benefit that they would be required to pay back, according to data acquired by the Journal. It’s not clear how many people received those letters; NMDWS spokeswoman Stacy Johnston said individual claimants may have received multiple letters.
In some cases, claimants’ benefits are garnished, and they may even face liens on their property.
Some claimants weren’t aware they were paid more than they were entitled to until they received one of the letters, as the determination may have come down to a mistake on their application or new information received by the agency.
But receiving such a letter leaves benefit claimants such as Debra, a self-employed Gallup resident, facing an unexpected bill when already struggling financially.
“At some point, they have to stop creating more problems than they’re solving,” she said.
Debra was told that, as someone who owns and operates her own business, she didn’t qualify for standard unemployment. She was approved for the federal Pandemic Unemployment Assistance program, which provides benefits for self-employed people who lost work due to the pandemic.
She received $173 per week from the state plus the expanded $600 per week under the federal program for a few months starting in late April. In late July, she was informed that while she did in fact qualify for standard unemployment, the state had determined she had been overpaid through the new federal program by about $10,000.
Debra has disputed the dollar amount owed.
She said that at first she was patient and worked with the department to pay back the majority of the amount, which was deducted from her weekly unemployment benefits over the rest of the year.
By the end of 2020, however, Debra said, she was frustrated by discrepancies over her remaining balance and a lack of communication from the department.
“I don’t want some big, huge debt hanging over my head,” she said.
As of the start of 2021, Johnston said, 13,564 of the overpayments had been resolved through regular deductions from weekly benefits.
The overpayment problem isn’t unique to New Mexico.
Alexa Tapia, unemployment insurance campaign coordinator for the National Employment Law Project, said issues with overpayment have occurred across the country since the COVID-19 pandemic began. Tapia said many challenges stem from how new federal programs such as PUA were adopted.
Tapia said that many state unemployment systems are antiquated and that states have found it challenging to add a new program to existing ones.
“It’s just adding another layer on another flawed program,” she said.
Many states, including New Mexico, added staff to handle the crush of unemployment claims once the pandemic began, which Tapia said can add to the confusion as new hires struggle to sift through the labyrinth of programs and rules.
She said PUA recipients, who by definition aren’t eligible for standard unemployment, may be unsure about how to apply.
“Unemployment insurance, as we’ve seen, is not an easy process,” she said.
Johnston said in an email that overpayment determinations can arise in New Mexico for a few reasons. In some cases, she said, claimants don’t report their gross income before deductions, causing them to be paid more than they’re owed.
Other common issues include continuing to receive unemployment after returning to work; failing to report all earnings or other information that could affect the claim; returning to a job with retroactive pay awarded after a grievance hearing; or retroactively being found ineligible for a program after receiving benefits, Johnston said.
However, the reality isn’t always straightforward.
Alicia Clark, benefits attorney with New Mexico Legal Aid, said issues are often tied to how employees leave their jobs.
If claimants are found to have quit or refused a rehire offer, they can end up owing money if the terms of that exit are disputed, Clark said.
In other cases, Clark said, claimants such as Debra may be approved for PUA before additional information shows they should have received funds from a different pot of unemployment assistance, thus leaving them liable to pay back benefits through no fault of their own.
“It’s a lot for people to navigate, you know?” Clark said.
Although recipients have 15 days to appeal overpayment, Clark said that information isn’t easy to find if they’re just skimming the letter.
“I don’t think the notices that are going out are really forceful enough to really notify people of what they’re up against,” Clark said.
When an overpayment occurs in New Mexico, Johnston said, the state Department of Workforce Solurions will send an initial notice and a monetary determination. She said claimants may pay in a lump sum or request to pay in installments. In cases involving fraud, the claimant cannot offset the payment with future benefits.
Johnston advised claimants to read through correspondence with the department carefully and accurately report claims to avoid finding themselves having to pay back large sums of money.
Both Tapia and Clark suggested seeking legal representation to help navigate complex issues. Clark said Legal Aid is available for everything from simple advice to full legal representation, but most claimants don’t know they can get help.
“These people are entitled to benefits, and we can help them get them,” Clark said.