Local News

ESC backs off on collecting overpayments of jobless benefits

Posted September 30, 2010 5:50 p.m. EDT
Updated September 30, 2010 7:15 p.m. EDT

— The state Employment Security Commission said Thursday that it will work with the federal government in hopes of allowing thousands of unemployed North Carolina residents keep $28 million in jobless benefits that was mistakenly paid to them earlier this year.

A computer programming error led to overpayments to about 38,000 people receiving a second year of benefits, ESC officials said. The mistakes occurred in checks issued from January through mid-May, when an internal audit caught the problem.

The agency began sending letters to people last week to inform them of the errors and to detail how much they might owe. ESC Deputy Chairman David Clegg said many of the people receiving letters would end up owing nothing, and about 15 percent were underpaid and would be eligible to receive more money.

Many unemployed residents, however, were incensed when the ESC began cutting their weekly benefit checks in half to recoup the money mistakenly paid out earlier.

Raleigh resident Tammy Lee said the ESC stopped sending her benefit checks altogether.

"I had no warning that I was getting nothing," said Lee, who was laid off from her sales job in February 2009. "I'm in a constant state of panic."

Clegg said officials had to address the issue while the people affected were still receiving benefits.

Lee said she became even more upset this week when the ESC sent her two letters: One said she was no longer eligible for benefits while the second said she remains eligible.

"When you say you have these letters, they don't even want to talk to you. They transfer you," she said.

ESC officials issued a statement late Thursday, saying they had worked out a plan with Gov. Beverly Perdue and U.S. Department of Labor Assistant Secretary Jane Oates to waive repayment of the overpayments, if possible.

ESC Chairwoman Lynn Holmes plans to issue an order waiving repayment, and she will ask Perdue to issue a similar executive order, if required by the federal government.

All claims still need to be reviewed on a case-by-case basis to determine if they're eligible for a waiver, the statement said.

ESC officials declined to answer questions about the plan, including how the state would repay the $28 million owed to the government and whether the money already taken from people's benefits checks would be returned.

"I sincerely apologize for the confusion and inconvenience caused to our citizens over this issue,” Holmes said in the statement. “I could have done a better job communicating this error, and the resolution of the error, to our beneficiaries. I have instructed the ESC staff to work diligently to correct this problem and make sure every claim is handled fairly and accurately.”

The agency plans to keep its phone lines open late and to provide better information to people who have questions about the issue, officials said.

Officials are still 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, Clegg said.

"I'm angry. I think somebody needs to be held accountable for this," Lee said. "I kind of feel like I'm a hamster in one of those wheels that I can't get off."