Missouri Unemployment Overpayments: State Demands People Pay Up More than 46,000 Missourians have received letters demanding repayment. The state says it paid out more than $150 million last year to people who it later determined weren't eligible for the benefits.
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States Can Forgive Unemployment Overpayments, But Missouri Demands People Pay Up

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States Can Forgive Unemployment Overpayments, But Missouri Demands People Pay Up

States Can Forgive Unemployment Overpayments, But Missouri Demands People Pay Up

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NOEL KING, HOST:

The federal relief package that passed in December gave states the power to forgive overpaid federal unemployment benefits. Most states are taking them up on that, but Missouri is not. Here's Corinne Ruff from St. Louis Public Radio.

CORINNE RUFF, BYLINE: In the middle of December, Sandra Griffin saw a new message pop up in her online unemployment account.

SANDRA GRIFFIN: You were overpaid by no fault of your own - that's what the letter states - by no fault of your own, and you are required to pay it back.

RUFF: The message said she owed the Missouri Department of Labor nearly $8,000. That's money Griffin says she already spent on bills after the coronavirus pandemic hit and she lost her job teaching art programs in St. Louis schools. Normally, she counts on summer school to make most of her income. But there was no clear plan for schools to reopen, so her employer encouraged her to file for unemployment. Turns out, people who work for educational institutions aren't eligible for unemployment over the summer when most teachers are off.

GRIFFIN: So they were saying that all the months that I collected over the summer, I was ineligible to collect those, although they had reassured me during the summer during phone calls that everything was fine. So there was, you know, a contradiction there in what's going on.

RUFF: Griffin filed an appeal, but since the system is backed up, her hearing isn't for another six months. In the meantime, she doesn't have to pay anything. More than 46,000 Missourians have also gotten letters demanding repayment. The state says it paid out more than $150 million last year to people who it later determined weren't eligible for the money. Lawmakers from both parties have been calling on Governor Mike Parson to forgive the overpayments that don't involve fraud - about 97% of cases. But Parson told reporters earlier this month that a state law requires collection of overpayments, and he doesn't plan to override it.

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MIKE PARSON: There was mistakes made. There's no doubt about that. But at the end of the day, I think there is a responsibility as taxpayers' money. If somebody got more money than they should have got, you should ask for it back and says, hey, you know, you owe that to the taxpayer. You don't owe it to me but to the people who paid it.

RUFF: Missouri State Representative LaKeySha Bosley, a Democrat from St. Louis, says Parson's reasoning doesn't add up. A bulk of the overpaid funds are from new federal programs, and the relief package from December gave states the ability to waive overpayments. So Bosley filed the bill earlier this month that would keep the state from collecting overpaid federal benefits for non-fraud cases during times of crisis, like the pandemic.

LAKEYSHA BOSLEY: Asking people to pay back $8,000, $10,000, $11,000, even $200, it's just too far. And it's too much. And now you're crushing their hopes that things will go back to normal and that they can rely on their government to help and step in when they need it.

RUFF: Alexa Tapia is with the workers' rights think tank National Employment Law Project. Even states that she says have better systems are struggling to keep up with the influx of first-time filers, new federal programs and overpayments. Like Missouri, Kentucky also has a state law requiring collection of overpaid benefits. Lawmakers and the governor's office are still working out how to grant waivers. But Tapia says most other states, like Illinois and Colorado, are already starting to forgive overpayments. She says that's because there's no incentive to go after the money.

ALEXA TAPIA: It actually creates more work for the states to collect that money. And of course, they do have that discretion to do so. But it would harm their local economies and their citizens, who they should be trying to uplift at this time.

RUFF: And she says overpayment bills disproportionately impact people of color. Equity and economic recovery are reasons more states are forgiving overpayments. Tapia worries that states like Missouri will spend more energy fighting appeals than getting payments out to people who are still waiting on help. For NPR News, I'm Corinne Ruff in St. Louis.

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