Michigan to resume collections on overpaid unemployment benefits

Michigan workforce members who have received excessive unemployment benefits will begin repaying those funds this month. After a pause in collections, individuals are now expected to make their first payments by September 29th. The temporary halt in collection efforts was put in place while a class action lawsuit against the state’s unemployment agency was being resolved in court.

Approximately 350,000 workers who have outstanding claims dating back to March 2020 will be affected by this resumption in collections. Many of these individuals initially filed for benefits during the peak of the Covid-19 pandemic in 2020 and 2021. Starting on Friday, the collection freeze will be lifted, and notifications will be sent out to those who owe money through their Michigan Web Account Manager (MiWAM) accounts. Following this initial notification, individuals will also receive a Form 1088 collection notice detailing the amount of money owed.

For those who find themselves in debt to the state, there are two primary methods of repayment. Firstly, payments can be submitted through one’s MiWAM account. Alternatively, individuals can choose to send a check or money order, along with the Form 1088 Payment Voucher, to the Unemployment Insurance Agency-Restitution address in Detroit. If paying by check or money order without the voucher, it is essential to include a claim number on the payment. In cases where individuals are unable to make repayments, hardship waivers are available. The fastest way to apply for such a waiver is through the MiWAM account, or individuals can submit a request using Form 1795 at Michigan.gov/UIA. Ultimately, the Unemployment Insurance Agency will determine eligibility for hardship waivers, with overpayments not being forgiven in cases involving fraud.

Jason Palmer, the Director of the UIA, emphasized the agency’s understanding of the financial impact these collections may have on households while highlighting the legal responsibility to recoup overpaid funds. The aim is to ensure that taxpayer money is returned to the Unemployment Insurance Trust Fund, ultimately benefiting workers who may require financial assistance in the future.

Individuals who were previously informed of their overpayments had collections put on hold due to ongoing legal proceedings related to a class action lawsuit against the unemployment agency. The recently settled lawsuit, Saunders v. UIA, paved the way for the resumption of collection efforts in Michigan. The information provided comes directly from the State of Michigan.