Overpayments occur when the NJDOL determines that you received unemployment benefits to which you were not entitled. This can happen when the NJDOL makes a mistake in determining your eligibility for benefits, like when it calculates that you worked longer or earned more than you actually did. Overpayments can also happen when the NJDOL finds that you should have been disqualified from benefits after you already received some or all of your unemployment benefits. Such determinations often result from late “employer protests,” when employers contact the NJDOL to contest your unemployment benefits after you began receiving them. Employers have incentive to do this because they do not have to pay as much in taxes if you are disqualified from receiving unemployment benefits.
Overpayments can raise complicated, procedural due process issues. The following paragraphs offer some general information about overpayments and refunds, but if you are facing an overpayment, you should consult an attorney for advice.
In general, if you received any unemployment benefits to which you were not entitled, you will have to repay the benefits to the NJDOL. When this happens, the NJDOL will send you a notice of overpayment setting forth the exact amount of money that you are asked to repay and why you have an overpayment on your record. The notice will also tell you if you are being charged interest (this occurs in cases of fraud), how much the NJDOL expects you to repay each month, and what you must do to appeal the NJDOL’s determination that you received benefits in error.
If you agree that you are liable for a refund of your benefits, you should begin to repay the debt to the NJDOL as soon as possible. You can make electronic payments or send checks to the NJDOL. If you are unable to pay the monthly amount that the NJDOL has determined you should pay, you can ask the NJDOL for permission to pay a lesser amount. That amount will then be listed as the official amount in your “formal monthly agreement” with the NJDOL. To negotiate a formal monthly agreement with the NJDOL, call the Office of Benefit Payment Control at 609-292-0030.
If you disagree with the NJDOL’s overpayment finding, you have the right to appeal. The appeals process for overpayments is the same as for other unemployment issues (e.g. you appeal first to the Appeal Tribunal, then to the Board of Review, then to the Appellate Division, and so on). To appeal an overpayment determination, you must send a Notice of Appeal (a brief statement explaining that you disagree with the determination) to the NJDOL within 10 days of the mailing date on the determination or within 7 days of your receipt of the determination. Once you file your letter of appeal, you will be scheduled for an Appeal Tribunal hearing. Overpayment cases, in particular, require very careful scrutiny of the case record (you will want to know who made the mistake, why, and when), so request a complete copy of your case file right away.
If, after you go through the appeals process, the NJDOL determines that you must refund the benefits you received, you will have to repay the NJDOL either in a lump sum or in monthly payments, as described above. If you are currently receiving unemployment benefits, the NJDOL will use your current benefits to repay the debt. In that case, you continue to claim your benefits every two weeks, but instead of you receiving the unemployment benefits, the benefits will be used to satisfy your debt. If you have not entered into a formal monthly agreement or have not paid your required monthly payment, the NJDOL will take your state income tax refund/rebate and apply it to the debt. The NJDOL has the right to engage in further collections activities to recoup the overpaid benefits.
Requesting a Waiver of Overpayment
In very limited circumstances, a person facing an overpayment can request that the entire overpayment be waived so that he doesn’t have to repay any money at all. Waivers of recovery of overpayments are only granted where a claimant was completely honest in his application to obtain benefits and where: 1) the claimant is now deceased; 2) the claimant is disabled and no longer able to work; or 3) the Director of the Unemployment Insurance Division decides that it would be unjust to make the person repay the benefits.
To request a waiver of debt, you must complete and submit a Request for Waiver of Overpayment of Unemployment Benefits. If you are requesting a waiver because you are disabled and no longer able to work, you will need to show proof of your permanent disability. Your treating doctor will have to complete a certification to support your request for a waiver. You should also be prepared to submit other medical evidence, such as proof of receipt of Social Security Disability benefits or documentation of your disability from a treating doctor.
“Agency Error” Cases
Overpayments that result from a mistake of the NJDOL alone are treated differently from overpayments that result from a mistake you or your employer made. Having your case marked as an “Agency Error” case limits the collections efforts the NJDOL can take against you. If you were completely honest and forthcoming to the NJDOL with all of the facts regarding your unemployment claim, and the overpayment truly was the result of the NJDOL’s error, then the NJDOL should not initiate collections activities against you. You still have to repay the debt, but collections are limited. In other words, if the overpayment was due to the NJDOL’s mistake, you will not have to enter into a formal monthly agreement, and you should not have your tax refunds or rebates withheld. In this limited circumstance, when the NJDOL alone is responsible for the mistaken payment to you, the NJDOL can only get the benefits back from you by taking half of each weekly unemployment payment made to you in the future. So if you have an overpayment stemming from the NJDOL’s mistake, the NJDOL is entitled to repayment of the benefits paid to you in error, but they can only get their money back if you claim unemployment benefits in the future. In that case, the NJDOL would only be allowed to take half of your weekly unemployment benefits until the entire debt is repaid.
To have your case marked as an “Agency Error” case, you may write to the Director of the Division of Unemployment Insurance explaining the facts of your case. You can send your request to: New Jersey Department of Labor and Workforce Development, Division of Unemployment Insurance, P.O. Box 058, Trenton, NJ 08625-0058.