UIA secures federal approval to suspend overpayment collections for nearly 400,000 claimants

New wage garnishments, state tax return intercepts halted while Agency prepares to apply more waivers beyond 62,000 already granted

The Michigan Unemployment Insurance Agency (UIA) has secured a second approval from the U.S. Department of Labor (U.S. DOL) to suspend certain collection activities for 391,769 workers who applied for federal jobless benefits during the COVID-19 pandemic. The suspension is key to UIA’s continued progress in granting overpayment waivers to claimants who were asked to repay some or all of the federal benefits they received.

The suspension stops new wage garnishments and State of Michigan tax refund intercepts and is the second time UIA Director Julia Dale has worked with U.S. DOL to grant the suspension to provide relief for Michigan workers. An earlier suspension expired in May.

“My top priority is to help Michigan families. When we work any claim we recognize that each one represents a worker who has fallen on hard times, and a family that needs help to put food on the table, pay bills and keep a roof over their heads,” Dale said. “The suspension will put money back in the pockets of people who needed pandemic unemployment benefits and followed the rules when they asked for help. This federal action will allow us the time we need to evaluate claims for overpayment waivers, which we will be announcing soon.”

Dale announced last week waivers on approximately 7,300 overpayment claims that waived $53.2 million in repayments. In May, UIA applied waivers to 55,000 claims totaling $431 million. A total of $484.2 million in overpayments have been waived on 62,300 claims this year.

The suspension through Oct. 31, 2022, halts collections on unemployment benefits programs launched under the Coronavirus Aid, Relief, and Economic Security (CARES) Act and its extensions: Pandemic Unemployment Assistance (PUA), Pandemic Emergency Unemployment Compensation (PEUC), Federal Pandemic Unemployment Compensation (FPUC), Mixed Earnings Unemployment Compensation (MEUC) and federal reimbursement for the first week of benefits.

Because those programs were federally funded, the UIA is required to actively collect overpayments, unless specific suspensions are obtained from the federal government.

The suspension DOES NOT apply to:

• Claims determined to be fraudulent or being investigated for fraud.
• State unemployment insurance program overpayments.
• Delinquent debts owed to other states or federal agencies.

The collections suspension does not stop agency collections activities such as existing wage garnishments, intercepting federal tax returns, deducting a percentage from current unemployment benefit payments, or recovering overpayments for other states. Collections of overpayments made before the onset of the pandemic in March 2020 will not be suspended.

Director Dale and UIA staff remain in constant contact with the federal DOL, advising them of the progress on waivers and advocating aggressively on behalf of Michigan workers and their families, so that no one is forced to repay benefits due to changes that affected their claims after they applied for benefits they needed during a global crisis.

UIA will continue to review all overpayment claims to see how many more may be eligible for waivers.

If claimants qualify for a waiver, UIA will notify them through an online message to their Michigan Web Account Manager (MiWAM) accounts and by a letter mailed to the address on file. There is no application process. If a waiver does not apply, collections will resume.

Those with questions about the suspension or overpayments can go to Michigan.gov/UIA and click on the Schedule an Appointment link to speak with a trained staff member either in person, by phone or online. Convenient times and dates are available. Claimants can also call UIA’s Customer Service at 1-866-500-0017.

Since July 2021, the UIA has waived more than $4.35 billion in overpayment debt related to federal pandemic jobless benefits programs on more than 407,300 claims.

Awarding waivers is a cornerstone of Director Dale’s reform of the UIA, including chasing down bad actors who steal money from workers, striving for exemplary customer service and leading the effort to replace the Agency’s decade-old computer system with a user-friendly, state-of-the-art interface for claimants and businesses. A new system will allow for quick analysis of data that is currently not possible for the agency.

Since Dale was appointed director in October 2021, she also has:

• Reassigned staff and resources to address the largest categories of claims that are contributing to the agency’s case backlog.
• Implemented new policies for employees and contractors, including fingerprinting, criminal background checks, and an updated ethics policy.
• Collaborated with the Attorney General’s office to combat fraud at the agency.
• Built a new, user-friendly website that is more responsive to those using a mobile phone or tablet to access services. 

Rebuilt to $1.5 billion (and growing) the UI Trust Fund from which weekly benefits are paid to workers who lose their job through no fault of their own.