Colorado overpays nearly $93 million in unemployment benefits during COVID-19 pandemic

Problem Solvers

DENVER (KDVR) — The State of Colorado has overpaid nearly $93 million in unemployment benefits since the COVID-19 pandemic started, according to data obtained by the FOX31 Problem Solvers.

Records provided by the Colorado Department of Labor and Employment (CDLE) show overpayments between April 2020 and January 2021 totaled $92,748,476.33. For context, the state has also paid out more than $7 billion in benefits to more than one million people since the beginning of the pandemic, according to CDLE. 

“Overpayments are tracked and reported to the US Dept of Labor on a regular basis,” Cher Haavind, the deputy executive director and chief communications officer for the Colorado Department of Labor and Employment, told the Problem Solvers over email. “Colorado is exceeding US Dept of Labor requirements for improper payment levels.”

Records provided by the state show there were 50,172 overpayments made from the start of the pandemic through January 2021.

“We do not track overpayment by individuals, but instead we track them by the overpayment,” said Angela Pfannenstiel, a Colorado unemployment insurance policy and communications manager in an email to the Problem Solvers. “One individual could have multiple overpayments.”

Many people, including Mark Pitcher, an Uber driver whose business was sidelined during the pandemic, have contacted the Problem Solvers with concerns over notifications they’ve received from the state, asking for the money back.

Pitcher said he received a letter indicating he had been overpaid by more than $3,500.

“They wanted it immediately. I was scared. I was nervous. I don’t want to be out on the streets, and it’s really tough nowadays to make a living and make extra money,” he said.

“Overpayments (also called improper payments) occur for a variety of reasons including misreporting of income, a redetermination of benefit amount due to more accurate wage data, ineligibility due to a claimant working while collecting benefits, appeals decisions and fraud,” said Haavind.

“CDLE’s priority is to ensure proper payments while stopping those that are improper or fraudulent. Colorado had previously forgiven overpayments the state has previously made when it’s the state’s fault, but if an individual is deliberately or accidentally misrepresenting information then the state will try to recuperate those funds,” State Press Secretary Conor Cahill said.

Waivers and Write-offs

At least $61,119,207.22 in overpayments have been written off by the state, according to numbers provided by CDLE, and payments totaling $998,294.45 have been waived.

Pitcher said he applied for a waiver and is waiting to learn whether it will be approved.

“Claimants then have the opportunity to appeal the overpayment,” said Haavind. “After our team takes a deeper look at each individual case, a decision is made whether or not the overpayment can be waived. If it is determined the overpayment is accurate, they can be collected through future benefit offsets, negotiated repayment plans and tax return interceptions.”

Last year, she said, officials decided to “forgive” Pandemic Unemployment Assistance overpayments because the process of filing was “cumbersome and confusing.”

That resulted in claimants “inaccurately reporting the income used to calculate the PUA weekly benefit amount,” she said. “That paired with the extreme economic hardships everyone is facing as a result of the pandemic, we felt it prudent that we not ask struggling Coloradans to pay that money back.”

However, not every overpayment will be forgiven, she said.  If someone misreports their earnings or fails to look for work, they could be denied a waiver.

Fraud and Error

Some people contacted the Problem Solvers with concerns they have received overpayment notifications in error or as the result of a fraudulent claim in their name.

For example someone who never filed for unemployment benefits should not be receiving a notification that they were overpaid.

“We encourage these folks to report this as fraud,” said Haavind. “They likely had someone use their identity to file an unemployment claim without their knowledge.”

People can report the information to labor department. Victims of fraud are also encouraged to contact the three consumer credit bureaus to put a fraud alert on their names and social security numbers.

  • Equifax: 1-800-525-6285
  • Experian: 1-888-397-3742
  • TransUnion: 1-800-680-7289

Haavind said the department has “a known issue with the system” that mistakenly sends overpayment letters to claimants even though their overpayments have previously been resolved or forgiven.

Haavind said those people should not worry. “Our system will recognize the overpayment as forgiven and right itself.”

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