New Jersey is asking Congress to forgive more than 130,000 people in the state who have been told they were overpaid in unemployment benefits during the COVID-19 pandemic.
State labor officials estimate that as many as 250,000 New Jerseyans could be affected, having received payments for unemployment benefits for which they were no longer eligible after federal rules changes. Officials are asking Congress to waive those charges as long as the payments were not fraudulent.
New Jersey Department of Labor and Workforce Development Commissioner Robert Asaro-Angelo signed onto a Jan. 7 letter written by the National Association of State Workforce Agencies – a nonprofit representing all 50 state labor departments – asking Congress for the forgiveness. It’s addressed to Republican and Democratic leadership in both chambers.
“Millions of unemployed workers deemed eligible for federal pandemic unemployment benefits later found out that the rules had changed, and, through no fault of their own, were no longer considered eligible – months after they had spent the money on necessities like food and housing,” reads a prepared Jan. 25 statement from Asaro-Angelo.
The pandemic business closures of March and April 2020 triggered record-high jobless claims and unemployment, reaching as high as 16.6% in July that year.
Businesses such as malls, restaurants, casinos, bars, retail, theaters, entertainment venues, gyms, barbershops and salons all had to shutter their doors for months on end, and then operate at reduced capacity. In response, Congress approved a slew of expanded unemployment benefits to help many Americans affected by the closures maintain some type of income and put food on the table.
That meant unemployment benefits for those not typically eligible–such as freelance workers, gig workers and the self-employed.
“To try to recover these funds after the fact stresses these workers and their families, strains the system of resources with little chance of success, and is counterintuitive to our mission of helping people in their time of need,” the New Jersey labor commissioner said.
Rules gradually changed since that first round of federal relief in March 2020, the NJDOL noted. For example, claimants were no longer able to self-certify their income and employment history, but instead had to provide documentation.
NASWA noted in its letter that while some states have a waiver process, congressional-level action would be the most effective way to “prevent further hardships on these individuals.”
“The likelihood of recovering these funds is low and the cost of states’ efforts to secure repayment far outweighs any monetary returns,” the letter continues.