There are two categories of overpayment: fault and nonfault. For fault overpayments, the Unemployment Department will forgive one-half of the unpaid interest and monetary penalties owed, and will waive one-half of any previously imposed, but unserved, penalty weeks. For nonfault overpayments, the department will waive one-half of the remaining overpayment balance.
The amnesty program runs from June 1, 2013 until Aug. 31, 2013. The Unemployment Department has declared that, “The time to pay what you owe is running out,” … “Claimants and employers who have not paid their obligation by the deadline will incur additional financial penalties and could face possible legal action including lien filings and criminal prosecution.” Although that is the claim, is unemployment amnesty worth it?
Fault Overpayment: Amnesty Is A Hard Sell
Virtually all overpayments are considered fault. The share a combination of similar attributes: (1) repayment of full amount, (2) interest, (3) monetary penalty, and (4) penalty weeks. Here are some considerations for whether it makes sense to participate:
- The amnesty reduction is minimal. It cuts in half only interest, monetary penalty, and penalty weeks. The interest rate is low and competitive. The penalty weeks will go unused if you do not require unemployment. Basically, the amount you are saving is extremely small.
- Amnesty requires a lump sum payment. The largest criticism of this program is that claimants do not have any ability to repay a massive sum in a single term. Consider that many people may owe nearly $25,000. How people who in the recent past have lost a job are supposed to put together such a sum of money is beyond us as well.
- Will the Unemployment Department file a civil complaint? We are not sure. Recently, there has been major negative press around unemployment fraud. This has resulted in the agency redoubling its efforts to recoup lost funds.
- Will you be prosecuted? Probably not, but its possible. It is solely up to the discretion of the agency, but we have identified several factors. The main one always seems to relate to the volume of evidence held by the Unemployment Department that you committed a knowing fraud. For example, if your employer has provided the agency with detailed records showing you made a fraudulent misrepresentation.
- Statue Of Limitations: The statute of limitations has been increased from six years to 10 years for the collection of fault overpayments.
- Have they put a lien on your home? Have they put a lien on your social security? This primarily matters because it will toll the statute of limitations. For example, if a lien exists then after 10 years, it will still exist. However, if this hasn’t been levied, you should be counting down from 10 years until you are free and clear.
What is our opinion? Considering that this amnesty provides only an extremely minor benefit, it is a very hard sell to most. Since the agency is chronically underfunded and has far to many overpayments to handle, many who have not been hit with liens or legal proceedings choose to ignore the issue. While we understand how that position makes sense, there figuratively is the Sword of Damocles hanging over your head for the next 10 years. Since people are adverse to living with such a burden, many choose to address the issue head on.
Should You Contact A Lawyer
Without a lawyer there is extreme exposure. For example, individuals who have come forward to try and negotiate a settlement essentially waive a banner saying “I am here, come get me!” Suddenly, their negotiating position collapses as a liens are levied and legal proceedings are instituted. In a sense, a lawyer is a proxy because the agency will not know your personal details. That alone makes it worthwhile to utilize an attorney.
There are a multitude of other benefits that a lawyer will provide. This includes:
- Avoiding criminal prosecution and civil litigation.
- Arranging a monthly amount that you will pay back.
- Taking the case to the commonwealth court and expunge the entire matter.
- Offering advice and counsel on whether to even address the overpayment.
- Removal of liens.
- Negotiation of settlements.
Most lawyers, even many unemployment lawyers, do not have the knowledge of how to deal with an overpayment. If you are worried about your overpayment, please contact us right away.
The Amnesty Nonfault
The amnesty program for nonfault overpayments makes the most sense if you are the rare claimant with this problem. The balance is simply cut in half. But it is the extreme minority of people who receive nonfault overpayments and are required to pay it back. In fact, one objective we lay out for our clients who are hit with fault overpayments are to get the Referee to determine nonfault and in the super majority of situations it does not require overpayment. Only the rare nonfault determine results in repayment.
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