Missouri to waive part of mistakenly paid pandemic unemployment benefits

Missouri officials will waive most of the unemployment payments made in error to about 46,000 jobless residents during the pandemic last year, Gov. Mike Parson’s administration announced Tuesday.

Recipients of the mistaken payments will have to apply for a waiver with the Department of Labor and Industrial Relations. The decision applies only to the portion of the payments that came from the federal government’s unemployment programs during the pandemic, which made up roughly 75% of the money.

The department will start collecting back the remaining portion that came from state unemployment funds starting August, officials said. This despite Parson having signed a budget that allocates federal COVID-19 relief funds toward forgiving that portion of the payments.

The announcement came weeks after the legislature adjourned in May having failed to pass a bill forcing Parson’s administration to forgive the payments.

Lawmakers had acted quickly in February upon learning that the labor department was moving to claw back $150 million in what it said were mistaken payments during a record year of unemployment claims. The federal government has given permission to states to waive its portion of the money. But when Parson insisted it be collected, state representatives passed a bill requiring the forgiveness.

None of the “overpayments” at issue were made because of a fraudulent claim, labor officials have said.

The labor department suspended most collections on the money in April as the bill moved through the state Capitol. But the state Senate failed to pass the measure after Republicans tried to tie it to a proposal to cut unemployment benefits in the future.

Lawmakers also wrote $48 million of federal aid into the budget to cover the state’s share. Parson on Wednesday told reporters officials “will be addressing that issue further.”

“We’re still going to work on the state portion of that,” he said.

But he declined to endorse a full forgiveness of the money, repeating his reasoning that some of the cases could involve fraud.

“If it was a legitimate mistake, we’re fine with that,” he said. “But if there’s anything besides that, you’re not going to get a blanket waiver.”

Despite the halt on collections in April, some recipients have already seen the money clawed back. It is not clear whether they would get the money returned as a result of the new waiver program. A labor department spokeswoman could not immediately be reached for comment Wednesday.

The Star in May reported on the case of Amy Minich, who had been appealing her overpayments debt with the labor department but began collecting new unemployment benefits in April when her job at the Ford plant in Claycomo shut down again due to a parts shortage.

The case appeared to fall under one of the two exceptions under which the labor department said it would continue to claw back funds. To do that, the agency can garnish wages, intercept tax refunds or place liens on homes.

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

Reached by phone on Wednesday, the 39-year-old Lawson woman was wary upon hearing of the waiver announcement and unsure if she would benefit.

“They never stopped taking [the money] from people,” she said. “I just don’t trust it.”

Minich returned to work in June, but the plant is preparing to shut down again this month as the parts shortage drags on. She said the prospect of facing the labor department again to apply for another round of unemployment benefits is daunting.

“How’s it going to go this time? Are they going to generate another overpayment?” she said. “Their word is about as good as nothing.”