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ESC cuts jobless benefits to recoup overpayments

The state Employment Security Commission is withholding $28 million from the unemployment benefits being paid to thousands of people, saying the agency mistakenly overpaid them in recent months.

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RALEIGH, N.C. — The state Employment Security Commission is withholding $28 million from the unemployment benefits being paid to thousands of people, saying the agency mistakenly overpaid them in recent months.

David Clegg, deputy chairman of the ESC, said Wednesday that a computer programming error led to the problem for people receiving a second year of benefits. It's unclear how long the problem existed, but the discrepancies were caught early this year by an internal audit, officials said, and the agency had to address the issue while the people affected were still receiving benefits.

"What we are trying to do is deal with the issue," Clegg said. "We are obviously sorry it happened, and (we want to) deal with the issue and deal with it individually and as quickly as possible."

Letters have been mailed to about 38,000 people to explain how much they might owe, but the ESC hasn't been able to determine how many people owe money and how much the state might owe others.

Clegg said many of the people receiving letters will end up owing nothing, and about 15 percent were underpaid and will be eligible to receive more money.

People are receiving as many as six of the letters, which inform recipients that money could be withheld from their current benefits but don't indicate when they could begin seeing lower payments.

Durham resident Trumiller Nesbit said she was stunned when the ESC began cutting the amount in her weekly benefit checks after notifying her that she owed the state money.

"For it to come out of the blue – they took half my check – you can't plan for that," said Nesbit, who was laid off last year and is taking online classes to upgrade her skills while she looks for work.

"It's been very stressful. It's hard to do any studying," she said.

"What a huge screw-up by people who have jobs," Senate President Pro Tempore Marc Basnight said. "(This is) horrendous, to say the least, for people who are out of work and looking for work."

Basnight, D-Dare, questioned how the ESC could know the amount of overpayments but have no idea how much the state owes people who were underpaid. He called the series of letters to unemployed people "pure mismanagement" and said someone at the ESC needs to be held responsible for the mistake.

Gov. Beverly Perdue has asked for a better explanation of the situation, according to her spokeswoman, Chrissy Pearson.

"She wants to get to the bottom of this and fix it as soon as possible," Pearson said.

Clegg said the ESC is investigating to determine the source of the error that led to the overpayments. The technicalities of unemployment extensions granted by Congress and the heavy volume of people in the system contributed to the problem, he said.

Still, he defended the way the agency has handled the situation.

"I think that, based on our operating procedures, it was appropriate," he said. "Every one of those claims has got to be looked at individually, and that's what we are doing."

If people wind up owing the state money, Clegg said they can apply for a waiver. Waiver requests are due by Oct. 8, and the ESC will review them individually to determine if any accounting error has been made, he said. People can apply for the waiver at any unemployment office or send an e-mail requesting a waiver.

If the ESC denies a waiver, the affected person can appeal the decision like any other unemployment case, ESC spokesman Larry Parker said.

The ESC plans to keep its phone lines open until 8 p.m. each night this week to answer questions about the letters. Officials suggested that people e-mail the agency at esc.ui.customerservice@ncesc.gov since phone lines have been overloaded in recent days.



Erin Hartness, Reporter
Pete James, Photographer
Matthew Burns, Web Editor

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