Missouri Labor Department Pauses Unemployment Overpayment Collection After Lawmakers Raise Concerns
House members said the department agreed to stop sending letters threatening to garnish the money, but more than 30 people recently received letters saying the department filed a lien on their property.
Missouri lawmakers expressed frustration Tuesday with the Department of Labor for reneging on part of an informal deal they struck last month to pump the brakes on collection of unemployment overpayments.
Meanwhile, Rep. J. Eggleston, R-Maysville, sponsored a bill passed by the House last month that would forgive nearly $109 million in federal unemployment benefits mistakenly paid out by the state last year.
Yet the department has continued to demand payment of the state portion, about $40 million, even though lawmakers say officials agreed to work with people on payment plans.
During a meeting Tuesday of the House Special Committee on Government Oversight, Eggleston questioned Director Anna Hui about why people are still receiving letters threatening to garnish the money after the department agreed to stop sending them.
“It was our understanding that the commitment was that these letters — ‘we’re going to take your paycheck, we’re going to take your home’ — was going to stop as long as the recipient was making good faith efforts to communicate with you,” he said.
Eggleston said in the half-dozen cases he’s seen, people have filed appeals and have been working with the department to resolve the disputed unemployment benefits.
“It says ‘payment due immediately’ in all caps and bold letters and underneath it, ‘garnishment may be in order,'” he said, holding up the letters.
Hui said there’s a backlog of 1,800 appeals that haven't yet been processed, which may have led to 32 liens accidentally being placed on people’s properties in order to collect the money.
“Our apologies to those individuals. We will be reaching out to them,” she said.
After being pressed by multiple representatives, Hui later confirmed that her office had officially withdrawn those liens from courts on Tuesday.
“The letters are not good and not clear so I get it, we have to focus on fixing those letters,” she said.
While the department stopped pursuing collection of the federal portion of the overpayments on March 1, the letters listed the entire overpayment amount. The federal portion accounts for about 80% of the total Missouri residents were mistakenly paid.
In response to the concerns, Hui said the department is pausing all collection efforts for federal and state unemployment overpayments until the governor has a chance to review the legislation.
Gov. Mike Parson has previously said that he believes the 46,000 affected Missourians should pay the money back but also that he is receptive to the legislation.
Hui said she doesn’t believe the department made any mistakes. Rather, she said there was a miscommunication about what the department would do. She said the department has an obligation under state statute to collect overpayments of state unemployment benefits.
But GOP representatives said they feel now there’s a “trust issue” between them and the department.
Rep. Scott Cupps, R-Shell Knob, participated in the negotiations with Hui’s department and the governor’s office.
“I just feel a little bit stupid if I’m being honest,” he said.
Cupps said he spent a lot of time on the House floor trying to convince Rep. Peter Merideth, D-St. Louis, that the department would uphold the deal even without an emergency clause.
“I was incorrect,” he said.
Eggleston said it’s hard to know what to do going forward. The bill is now under consideration in the Senate.
“I don’t know what they’re going to do over there,” he said.
Follow Corinne on Twitter: @corinnsusan
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