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Texas Clawing Back $32 Million In Unemployment Benefits After Finding 46,000 People Were Overpaid

Workers boarded up bars on Sixth Street in Austin after Gov. Greg Abbott closed bars in Texas for the second time in three months because of the COVID-19 pandemic on June 26, 2020.
Jordan Vonderhaar for The Texas Tribune
Workers boarded up bars on Sixth Street in Austin after Gov. Greg Abbott closed bars in Texas for the second time in three months because of the COVID-19 pandemic on June 26, 2020.

More than 46,000 Texans who lost their jobs in recent months are having portions of their unemployment benefits clawed back after the Texas Workforce Commission found that they were initially overpaid.

The overpayments, first reported by the Houston Chronicle, are estimated to be more than $32 million in total since March.

“State law requires TWC to recover all unemployment benefits overpayments,” Cisco Gamez, spokesperson for the state agency, said in an email. “Overpayments stay on your record until repaid."

There can be several causes for overpayment, according to the agency, including fraud or incorrect reporting on an application. If TWC finds unemployment fraud in a case, the person has to give back the benefits and pay a 15% penalty.

Benefits must be repaid even if the state is to blame for the overpayment, or if it was otherwise not the recipient's fault.

"We cannot pay you benefits if you have an overpayment," Gamez said.

If the person that receives the notification of overpayment doesn't send back the money, the state comptroller can recover the money by withholding certain funds, including lottery winnings, unclaimed property, unemployment benefits and other state job-related expenses. Some state funding for college students cannot be released until a repayment is made in full.

Claimants who have received notices can appeal the process, but TWC can take legal action too if they don’t recover the money.

“There is no statute of limitations on debts owed to the state,” Gamez said on an email. “TWC cannot forgive or dismiss the overpayment and there is no exception for hardship.”

As of late June, 2.7 million Texans had filed for unemployment relief since mid-March, but TWC has struggled to keep up with the high levels of demand. Since the pandemic started, countless Texans have experienced problems accessing these benefits, encountering busy phone lines and an overwhelmed application website.

The Texas Tribune provided this story.