What is an overpayment of Unemployment Insurance Benefits?
An overpayment occurs when unemployment (UI) benefits are paid to a claimant who is later determined not to have been eligible or entitled to those benefits. Because UI benefits were paid to the claimant before a decision or action changed the claimant’s eligibility or entitlement, these benefits must be paid back to the Department of Workforce Development, regardless of fault.
What can cause an overpayment of Unemployment Insurance Benefits?
Some of the common causes of overpayments include:
- A DWD decision reverses a previous award of UI benefits to a claimant.
- A claimant and/or an employer fail to disclose that the claimant received vacation or severance pay, or other similar pay after a job separation.
- A claimant fails to accurately report earnings and hours worked while filing for UI benefits.
- A claimant’s weekly and/or maximum UI benefit amount changes (a monetary redetermination is made) because the wage information was incorrect when the claim was initially filed.
- A claimant is disqualified from receiving UI benefits due to being responsible for their job separation.
- A claimant fails to notify DWD that he or she does not meet the eligibility requirements.
Does filing an appeal stop collection of the overpayment?
The overpayment notice itself cannot be appealed. The collection of the overpayment is suspended only if the claimant files an appeal of the decision that caused the overpayment. Upon receipt of a timely appeal, the Appeals Section will schedule a hearing and at that time the collection of the overpayment is suspended until the hearing takes place and a decision is written. If the hearing is dismissed due to the appealing party’s failure to participate, the overpayment collection process resumes.
What happens if I fail to pay back my overpayment?
You will receive monthly billing notices and other collection letters regarding the amount owed. Should you become eligible for future UI benefits, 100% of each weekly benefit payment may be applied to the overpayment balance until it is paid in full. You may receive notice of a pending civil action by the Attorney General’s Office and/or your Indiana state and/or federal income tax refunds and lottery winnings may be withheld and applied to the overpayment. DWD may also forward delinquent accounts to a legal collection agent authorized to apply levies, wage garnishments, etc.
Can I make payments towards my overpayment in the WorkOne Office or Administrative Office?
Payments on your overpayment balance can be made in person at the Department of Workforce Development’s Administrative Office at 10 North Senate Avenue in Indianapolis, online at payingov.com/dwd or by U.S. Mail. The Administrative Office will accept payments in the form of a check, money order or exact cash. The Administrative Office is currently unable to accept payments by credit card, debit card, or fund transfers. WorkOne offices will not accept payments; however, they will provide a self-addressed, pre-paid envelope for you to mail your payment directly to the Administrative Office in Indianapolis. It is not recommended that you send cash through the U.S. Mail.
Where do I mail payments toward my overpayment balance?
Address the envelope as follows:
Indiana Workforce Development
Trust Fund Accounting – Overpayment
10 North Senate Avenue
Indianapolis, Indiana 46204-2277
Remember to include your Social Security number in your correspondence.
Can I be prosecuted for not reporting my work and earnings while receiving unemployment benefits?
Under Indiana Code 35-43-5-7 regarding Welfare Fraud, a person who knowingly or intentionally obtains public relief or assistance by fraudulent means commits a Class A misdemeanor for amounts received up to $750, a Level 6 felony for amounts more than $750 but less than $50,000, and a Level 5 felony if the amount is $50,000 or more.
For the first instance of fraud, a twenty-five (25%) penalty is assessed on the amount of the established overpayment. For a second instance of fraud, there is a fifty (50%) penalty and a one hundred percent (100%) penalty for the third and any subsequent fraudulent overpayments established. Interest will accrue at the rate of one-half (0.5%) per month on the unpaid balance.
If the overpayment is in my spouse’s name, why are you intercepting my tax refund?
Your Indiana state and/or federal tax refund may be intercepted to pay your overpayment balance. The Department of Revenue and IRS will match Social Security numbers with individuals who have an overpayment debt payable to the Department of Workforce Development. If you and your spouse file your taxes jointly, your refund may be intercepted to pay the overpayment debt.
Can my overpayment be written off if I file bankruptcy?
Bankruptcy may relieve overpayment debt if it is included in your bankruptcy filing. An overpayment established due to fraud is usually not dischargeable. DWD will file for an adversary hearing in the bankruptcy court to ensure that the fraud overpayment debt remains. The costs of this action will be added to the overpayment debt.