What does it mean if I have an overpayment of UC benefits?

An individual who files for unemployment compensation benefits may be found eligible to receive them. An individual is then entitled to collect his/her benefits if found eligible. However, there are certain situations where an individual will be collecting unemployment benefits and then get notice that they are in overpayment of benefits. What does that mean?

If you receive a Notice of Determination of Overpayment of Benefits, that means the UC Service Center has determined that you received unemployment benefits to which you were not entitled to. It is important to remember that every individual found in overpayment is entitled to appeal that determination by the appeal deadline. However, there are certain questions that need to be answered prior to filing an appeal to your Notice of Determination of Overpayment of Benefits.

How does one become in overpayment of unemployment benefits?

An individual can be in overpayment for various reasons. Some of the most common reasons are:

1. The individual didn’t provide accurate information to the UC Service Center when applying for benefits;
2. The individual answered incorrectly to a question on their initial application for benefits (i.e., when asked how you became separated from the Employer, you select lack of work instead of quit); or
3. The individual was initially found eligible for benefits but the Employer appealed and the decision to grant benefits was overturned.

What are the different types of overpayment?

On the Notice of Determination of Overpayment of Benefits, it will state whether the overpayment of benefits is a FAULT (FRAUD) or NON-FAULT (NON-FRAUD) overpayment. What are the differences?

A FAULT (or FRAUD) overpayment is when the UC Service Center finds that an individual knowingly or intentionally provided false information to the UC Service Center in order to obtain benefits. For example, let’s say an individual quit their job for a reason that they knew would make them ineligible for benefits. If the individual selected “lack of work” as to why they are no longer employed in order to obtain benefits, that individual would have knowingly and intentionally provided false information in order to collect unemployment benefits. If the individual subsequently received benefits because of the false information provided, that individual would be in FAULT or FRAUD overpayment. That individual would be subject to repaying the total amount of benefits they received as a result of the false information provided. The individual could also be subject to prosecution in some situations.

A NON-FAULT or NON-FRAUD overpayment is when the individual, through no fault of their own, received benefits to which they were not entitled. In this case, the individual did not contribute to the overpayment. The individual did not knowingly or intentionally provide false information to the UC Service Center in order to obtain benefits. For example, let’s say an individual was originally found eligible for benefits. If the Employer appeals and the individual is no longer eligible for benefits, the individual may be found to be in NON-FAULT overpayment. In other words, the individual received benefits that he/she was not entitled to but was not at fault for the overpayment. Therefore, the individual is still required to pay back the overpayment. However, with a NON-FAULT or NON-FRAUD overpayment, the overpayment is taken out of future unemployment benefits. If the individual is in overpayment of $1,000, that $1,000 will be taken out of future unemployment benefits.

It is important to know what an overpayment is and whether the overpayment is FAULT or NON-FAULT. The classification of overpayment will determine future liability.