‘In limbo again’: jobless Missourians could see benefits clawed back after lawmakers failed to act

The Missouri General Assembly was expected to take care of people like Amy Minich.

The forklift operator at Ford Motor Co.’s Kansas City Assembly Plant in Claycomo was forced to stay home for months during the pandemic. Then in December, after Minich was back on the job, she got a gut punch of a letter from the Missouri Department of Labor and Industrial Relations: she owed nearly $8,000. She was one of roughly 46,000 Missourians told that they’d mistakenly been “overpaid” in unemployment benefits.

“It was just an immediate sinking feeling, like I’m drowning,” the 39-year-old Lawson resident said.

Minich appealed her case in January and was waiting for a decision when the Ford plant shut down again in April, this time because of a global microchip shortage.

Her new unemployment checks came with another letter from the labor department, explaining they were deducting nearly $500 from each payment to go toward her debts. She’s been living on $135 a week.

Minich could have been spared this ordeal, but for drama in the state Senate. On May 14, the final day of the legislative session, senators adjourned four hours early amid a fight over the Conservative Caucus’ insistence on placing anti-abortion language in a routine medical provider tax to fund Medicaid.

The collapse of session killed the chances of several bills, including the popular measure that would have forced Gov. Mike Parson’s administration to waive the unemployment debts. It means tens of thousands of Missourians who lost work during the pandemic may soon find themselves in Minich’s shoes.

The labor department suspended most collections on the money in April as the bill moved through the state Capitol. Since the legislature adjourned two weeks ago without passing it, officials have been mum on whether they will now restart the clawbacks.

“We are examining the options available and will provide notice to affected claimants widely should the state begin collections processes,” department spokeswoman Maura Browning wrote in an email.

Browning did not respond to a request for comment about Minich’s case or provide a number of active collections cases. Because Minich is collecting new unemployment benefits, the case appears to fall under one of two exceptions in which the labor department said it would continue to claw back funds despite the April halt.

To do that, the agency can garnish wages, intercept tax refunds or place liens on homes.

Parson’s spokeswoman did not respond to an inquiry about how he would proceed. His administration and business interests have blamed enhanced unemployment benefits for a labor shortage. It’s a claim that economists say is unproven, but it has nevertheless complicated the politics of COVID relief.

“It’s made this whole conversation regarding unemployment to be very tricky,” said Rep. Scott Cupps, a Shell Knob Republican who pushed heavily for the debts to be waived this year. “I have been trying to tread lightly.”

‘Swung and missed’

House lawmakers like Cupps took swift action early this year when reports first surfaced that the state was moving to claw back $150 million in what it said were mistaken payments.

Roughly three quarters of that money came from the federal government, which has allowed it to be waived.

Angry legislators summoned Labor and Industrial Relations director Anna Hui to testify about collections in February. When she claimed state law required the claw back, the House quickly passed a bill forcing the federal share to be waived. It received near-unanimous, bipartisan support.

In the Senate, the bill was tabled when Republicans tried to add a provision to cut benefits in the regular unemployment program, and lawmakers never revisited it before the early adjournment. Majority Leader Caleb Rowden, a Columbia Republican, said after the adjournment the attempted cut was “something we swung and missed on.”

House Speaker Rob Vescovo, an Arnold Republican, said at a press conference he was “disappointed” the Senate failed to act, but it “probably won’t be the end of that conversation.”

It’s only led to more confusion for the overpayments recipients.

“We thought it was a done deal,” said Cindy Knittig, a St. Louis school bus driver who testified before the General Assembly in February about being hit with an overpayment notice. “Now we’re all in limbo again.”

Like other seasonal employees, Knittig would not ordinarily be eligible for unemployment benefits because she could be reasonably assured that after each summer, she’d work again in the fall. But the pandemic eliminated any expectation that schools would reopen. And the state assured her and co-workers they would qualify for benefits.

Knittig said some of her colleagues have had liens placed on their homes during the collections process. She’s still waiting for a hearing in her case, after filing an appeal in December.

“To have this hanging over your head all the time, wondering, ‘Are they gonna take my paycheck? What are they going to do?’” Knittig said. “People are tired.”

Her case, and Minich’s, illustrate the labor department’s chaotic and conflicting management of new rules and expanded programs last year.

When the Ford plant reopened last May, Minich didn’t return because she couldn’t find a babysitter for her four-year-old child, who suffers from a respiratory illness. Lacking childcare due to COVID was one reason the federal government allowed recipients who wouldn’t qualify for traditional unemployment to get on its expanded program, Pandemic Unemployment Assistance (PUA).

In December, Minich was told she didn’t qualify for the benefits she received last summer. With the help of Sen. Lauren Arthur, a Kansas City Democrat, she filed an appeal.

“The department doesn’t need to collect these overpayments,” Arthur said. “This was a mistake that they created.”

After her hearing, a labor official wrote to Minich this February that they determined she had been ineligible for the traditional program, and they would next decide whether she had been eligible for the federal PUA checks that she received.

Inexplicably, she said, the overpayments were then wiped away from her account. And she’s received three separate letters -- dated last July, last December and this March -- stating she did qualify for PUA last summer.

It wasn’t until Minich’s plant closed again in April that the debts reappeared. She still owes nearly $3,000.

‘Paying the price’

Lawmakers are wary about the labor department’s next moves.

Parson’s administration was initially adamant that the money be clawed back, even as the federal government allowed its portion to be forgiven. The governor also poured $300 million in federal aid into the state’s unemployment fund, to avoid penalizing businesses when the fund is drained.

Hui told lawmakers in February she would halt collections as the legislation advanced, but the department continued to try to claw back the state’s portion of the payments until another round of calls from angry lawmakers in April.

“Really all we can do is monitor the Department of Labor,” Cupps said. “I’m not confident that they’re not gonna, if we get a little ways out, they won’t start acting up again. What I am saying is that they aren’t acting up right now.”

Sen. Lincoln Hough, a Springfield Republican who chairs the Government Accountability and Fiscal Oversight committee, said he was hopeful the labor department will still waive a majority of the debt.

“In talking with the governor’s office since the end of session, they have said they are continuing to work on promulgating a rule that will allow for the federal portion to be waived,” he said. “I guess in my opinion, that is a step in the right direction.”

Such a step wouldn’t fulfill lawmakers’ wishes to forgive the full amount, despite that they also wrote $48 million of federal aid into the budget to cover the state’s share.

“One thing I’d really like to know is what they are going to do with all that money,” Knittig said. “The money’s all there, all the governor has to do is approve it.”

The clawbacks have left Minich barely afloat financially. Without her husband’s income paying their bills and supporting their two daughters, she said, “we would be homeless. We would have nothing.”

She’s drained her savings, gathered some belongings to hold a garage sale and filed numerous new appeals. She hopes the plant will reopen before even more of her checks are reduced. Parson recently announced that in mid-June Missouri will stop issuing extra federal unemployment benefits.

“I have a job,” she said. “I’m not a lazy person. I didn’t choose for the pandemic to happen. I didn’t choose for my daughter to have health issues. I didn’t choose for there to be a chip shortage.”

And yet, she said, “I feel like I’m paying the price for their mistakes.”

The Star’s Jonathan Shorman contributed reporting.

This story was originally published May 29, 2021 at 5:00 AM with the headline "‘In limbo again’: jobless Missourians could see benefits clawed back after lawmakers failed to act."