Unemployment Insurance

Web Library Topic - Overpayments

An overpayment occurs when the claimant has received unemployment benefits, and the Division of Employment subsequently determines the claimant was not entitled to those benefits.  One of the most common situation in which this occurs is when the claimant is awarded benefits in a decision, but that decision is then reversed on appeal.  At that point, the claimant is disqualified from unemployment benefits attributable to that employer, so any benefits the claimant has already collected must be paid back, because the disqualification essentially means the claimant was not entitled to receive those benefits at all.

Another situation that often occurs is when the claimant receives unemployment benefits for certain weeks, but it is later determined that the claimant was working during those weeks, or was otherwise not eligible to receive benefits for those weeks because they were not able or available for work, were not seeking employment, etc.  The claimant must then pay back the benefits.  In certain circumstances, a penalty may be assessed against a claimant who falsely misrepresented the facts in order to receive benefits (such as claiming unemployment benefits for a week the claimant was working).

The claimant may appeal the decision that caused the overpayment, and if that decision is reversed and benefits are awarded, the overpayment disappears and the claimant may once more receive unemployment benefits.  Otherwise, the claimant may request that the requirement to repay the benefits be waived.  If the waiver request is denied, the claimant may appeal that decision.  The claimant may also appeal a decision in which penalties were assessed.

Statutes

§ 8‑81‑101(4)(a)(I), C.R.S. 2005

Any person who has received any sum as benefits under articles 70 to 82 of this title to which he was not entitled shall be required to repay such amount to the division for the fund. Such sum shall be collected in the manner provided in section 8-79-102; except that the division may waive the repayment of an overpayment if the division determines such repayment to be inequitable.

§ 8‑81‑101(4)(a)(II), C.R.S. 2005

If any person receives any such overpayment because of his or her false representation or willful failure to disclose a material fact, inequitability shall not be a consideration in any civil, administrative, or criminal action, and the person shall be required to pay the total amount of the overpayment, which shall be paid into the unemployment trust fund, plus a penalty of fifty percent of such overpayment, which shall be paid into the unemployment revenue fund. In addition, such person may be denied benefits, when otherwise eligible, for a four-week period for each one-week period in which such person filed claims for or received benefits to which he or she was not entitled. The provisions of section 13ï·“80-108 (9), C.R.S., shall be used for determining when an offense is committed for the purposes of this subparagraph (II).

§ 8‑81‑101(4)(c), C.R.S. 2005

Any person aggrieved by a determination of the division made under this subsection (4) may appeal that determination and obtain a hearing before a hearing officer with the right to further appeal as provided by article 74 of this title. The initial appeal must be postmarked or received within fifteen calendar days after the date of notification of such determination by the division; otherwise, the determination shall be final.

Regulations

Regulation 15.2, 7 Code Colo. Reg. 1101-2

15.2.1 Statutory References: 8-79-102, 8-81-101 (4)(a)(I)(II) and 8-81-101 (4)(c), C.R.S.

15.2.2 Request for Waiver. When a determination establishing an overpayment is final, the overpaid claimant shall be notified of the overpayment and advised that a written request for waiver of recovery may be submitted to the Division. Upon receipt of such request, the Division shall suspend recovery of the overpayment until the waiver determination is final.

.1 If the final waiver determination denies said request, subsequent requests for waiver may be submitted upon a showing by the claimant of a significant change in financial conditions affecting his or her ability to repay the overpaid amount such as catastrophic illness or loss of employment.

.2 A final determination that approves a waiver request shall apply only to the overpaid balance at the time the request was made, as evidenced by the postmark date, if mailed, or the date received, if filed in-person, and shall not be retroactive to any part of the overpaid amount already recovered.

15.2.3 Completion of Required Forms. Financial and other relevant information that, in the opinion of the Division, is necessary to render a waiver determination may be requested from the claimant on any such form as may be prescribed by the Division. Failure to complete and return said form to the Division within fifteen (15) calendar days of its mailing shall cause the request for waiver to be determined based on available information.

15.2.4 Criteria for Waiver. A person who is overpaid any amount of benefits is liable for the amount overpaid. The Division may waive the recovery of all or any part of an overpaid amount only when:

.1 The overpayment did not result from false representation or willful failure to disclose a material fact by the claimant; and

.2 Requiring repayment would be inequitable.

15.2.5 False Representation. For purposes of Part XV of these regulations, the term, "false representation" means any representation made by an individual that he or she knew to be false or any representation made by an individual with an awareness that he or she did not know whether the representation was true or false.

15.2.6 Willful Failure to Disclose a Material Fact. For purposes of Part XV of these regulations, the term "willful failure to disclose a material fact" means knowingly withholding material information from the Division.

15.2.7 Inequitability. In determining whether requiring repayment of an overpaid amount is inequitable, the Division shall consider the following factors, which are not exclusive, and any other relevant factors:

.1 The claimant's financial condition required that the overpaid benefits be spent on reasonable and necessary living expenses.

.2 The claimant's household income is below the federal poverty income guidelines.

.3 The claimant lacks the ability to repay the overpaid amount based on prior income level, current household income and assets, and future earnings potential.

.4 Requiring repayment will cause extraordinary financial hardship by depriving the claimant of the ability to provide for basic necessities that cannot be deferred such as food, shelter, clothing, utilities, and medical costs not covered by insurance.

.5 The claimant detrimentally changed his or her position in reliance on the receipt of the overpaid benefits including, but not limited to, entering into a financial and/or contractual obligation that he or she would not have entered except for the receipt of the overpaid benefits.

.6 The claimant relinquished a valuable right in reliance on the receipt of the overpaid benefits, including the receipt of other governmental benefits for which he or she would have been entitled except for the receipt of the overpaid benefits. Although the claimant is not required to apply for other governmental benefits and be rejected from receiving them, he or she may be required to prove eligibility for such benefits by establishing his or her economic situation at the time unemployment benefits were received as well as the requirements for receiving said benefits.

.7 The claimant was at fault in causing the overpayment through his or her negligence, carelessness, or acceptance of a payment which the individual either knew, or reasonably could have been expected to know, was incorrect.

Cases

Division of Employment & Training v. Industrial Commission, 706 P.2d 433 (Colo. App. 1985)

"A 'false representation' requires that the representation be made knowing it to be false or with an awareness that the maker did not know whether it was true or false."  The culpable mental state cannot be presumed from the act alone.

Mugrauer v. Industrial Commission, 709 P.2d 47 (Colo. App. 1985)

A determination of whether it would be inequitable to require repayment requires consideration of the claimant’s assertion that he relinquished certain rights, such as public assistance.

Hesson v. Industrial Commission, 740 P.2d 526 (Colo. App. 1987)

Waiver of repayment is not compelled whenever a claimant has relinquished certain rights in reliance on receipt of benefits, or has used the benefits for living expenses.  However, those factors are part of the analysis of whether it would be inequitable to require repayment of benefits, as well as what part the Division played in increasing the amount of the overpayment.

Kalkbrenner v. Industrial Claim Appeals Office, 801 P.2d 545 (Colo. App. 1990)

The hearing officer must consider the claimant's future ability to repay an overpayment.  Here, the court found the claimant's inability to work for as long as two years because of a medical condition, as well as her financial status, was sufficient to grant a waiver of repayment.

Munoz-Navarette v. Industrial Claim Appeals Office, 833 P.2d 827 (Colo. App. 1992)

A claimant who argues that he or she detrimentally relied on the receipt of unemployment benefits as the basis for a waiver request must show that he or she was eligible to receive public assistance if the unemployment benefits had not been received.  However, the claimant does not need to actually apply for such assistance and then be denied.

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