What Does a Recoupment Decision Mean for Unemployment?

Unemployment benefits only go to those who meet their state’s eligibility requirements. Overpayments occur when you receive more compensation than you should. When the state finds out about the overpayment, it issues a recoupment decision explaining how much you must repay to the state and the reason why. The notice also has information about how to make your recoupment payment and whether your state allows waivers.

A recoupment decision occurs which your state’s labor office determines you owe money back to the state due to an unemployment overpayment. Overpayments occur when you receive unemployment benefits you were not entitled to, whether it was intentional on your part or not. Giving inaccurate information on your unemployment claim, claiming weeks you weren’t entitled to collect compensation or failure to disclose income can all result in overpayments. You must pay back overpayments and the recoupment decision determines how much you owe.

Several things can alert the state to the fact that you received an overpayment, including its fraud hot line and random audit system. Once the unemployment division reviews your claim and determines there was an overpayment, you receive a notice of a recoupment decision by mail. It details how much the overpayment is and the reason you owe the money. It also details how to protest the recoupment decision and how to pay back the overpayment.

Ideally, you pay back the entire overpayment as soon as you receive the recoupment decision. However, many people may find themselves unable to repay it in one payment. Most states allow payment plans if you contact the unemployment division. If you fail to pay or set up payment arrangements, the state can take any future unemployment benefits, garnish your wages and take your state income tax returns to apply toward the balance.

In some states, you have can apply to have your overpayment waived in special circumstances. It’s often only available in cases where you were not the cause of your overpayment; for example, if you received unentitled benefits because there was a calculation mistake at the state labor office. Even though you didn’t cause the overpayment, you still are responsible to pay it back. Granting of a waiver means the state forgives the overpayment. If your state allows that option, the instructions to request it are noted on the recoupment decision notice.