Unemployment Insurance Overpayment Waivers
What is an Overpayment Waiver?
The ETA Handbook 401 defines a Waiver as a "non-fraud overpayment for which the state agency, in accordance with state law, officially relinquishes the obligation of the claimant to repay." It further states that a "state may authorize a waiver when or if the overpayment was not the fault of the claimant and requiring repayment would be against equity and good conscience or would otherwise defeat the purpose of the UI law."
States should develop and implement criteria to determine if a waiver is necessary and granted to a claimant. The process of assessing whether to waive an overpayment includes conducting sufficient fact-finding and an eligibility decision on a non-fraud issue. Overpayment waivers directly affect the Recovery Rate, which is an integrity core measure for states. The percentage and dollar amount of a waived overpayment is important for several reasons:
- The amount of waivers could artificially inflate this measure since the Recovery Rate is comprised of the established overpayment dollar amount minus the dollar amount of waivers.
- The waiver dollar amount could be indicative of excessive administrative error as most states have a requirement that the overpayment must not be the fault of the claimant.
- A state may be experiencing system/programming issues where incorrect data is being reported.
- The state has an inconsistent or non-existent waiver policy.
The percentage of overpayments waived is calculated using four (4) rolling quarters from the ETA 227-Overpayment Detection and Recovery Activities report (see graph of overpayment waivers levels). This data shows that for the quarters ending March 2018 through September 2020 the National average for overpayment waivers (see table 1 for the formula), has been between 2% - 3%. However, for quarter ending September 30, 2020 the national average for overpayment waivers decreased to 1%. States should not compare the percentage of overpayments waived due to differences across the nation in areas such as: definitions of fraud, criteria for overpayment waivers, total dollar amount of overpayment established, and total dollar amount of overpayment recovered.
States should use this waiver data to evaluate their overpayment and recovery policies and procedures, while developing written guidelines that address its process for waiving overpayments that comply with both federal and state unemployment insurance laws.
Total Dollar Amount UI+EB+EUC Overpayments Waived
US (total of all states) UI+EB+EUC Overpayments Established
|= Nat'l Average of Overpayment Waivers|
- Unemployment Insurance Handbooks and Publications
- ET Handbook No. 401, 5th Edition – Unemployment Insurance Reports Handbook
- Comparison of State Unemployment Insurance Laws (as of January 1, 2017)
- ET Handbook No. 402 5th Edition – Unemployment Insurance Reports User Manual
- Unemployment Insurance Integrity and Core Measures
- Unemployment Insurance Network and Articles