Speaker Rob Vescovo: House moves to forgive federal unemployment overpayments
March 4, 2021 - Speaker Rob Vescovo (R-112) today announced passage of a bill that will allow thousands of Missourians who improperly received unemployment overpayments to have the federal portion of their debt forgiven. The bill, HCS HB 1083, 1085, 1050, 1035, 1036, 873 & 1097, sponsored by Rep. J. Eggleston (R-02) would ensure Missourians who received the overpayments non-fraudulently do not have to repay the federal dollars they received.
Because the Missouri Department of Labor & Industrial Relations was inundated with requests for unemployment benefits during the pandemic and was rushing to get payments processed, the Department sent out approximately $146 million in unemployment benefits to 46,000 Missourians who didn’t qualify. Those who received the aid went on to spend it on rent, mortgage payments, utilities and other necessities. Months later, the Department sent notice to these individuals that the aid they received had to be repaid. The average repayment amount was in the thousands of dollars.
“The financial assistance that recipients thought was a lifeline of survival has now become an anchor of debt,” said Rep. Eggleston. He added, “The legislature did not create this mess, but we can help clean it up.”
The bill passed by the House would instruct the Department of Labor and Industrial Relations to waive repayment of the federal portion of the overpayments for those who received them non-fraudulently. If the Department determines a recipient received money through fraud, those overpayments would not be waived. Under this bill, the Department would still seek repayment of the state portion of the overpayments. However the repayments would be made without interest and without penalties and the Department would work out an affordable payment plan with each recipient. In effect, the state portion will end up being a zero interest loan.
Rep. Eggleston said approximately 75 percent of the $146 million in overpayments is federal, and repayment on those funds will be forgiven.
“It doesn’t make a lot of sense to use state employees and state resources to recoup money from our citizens only to send that money to Washington D.C., especially when the feds aren’t asking for it back,” he said.
The bill now moves to the Senate for debate.