Local News

Perdue orders ESC to forgive overpayments of jobless benefits

Posted October 1, 2010 5:04 p.m. EDT
Updated October 1, 2010 6:58 p.m. EDT

— Gov. Beverly Perdue on Friday ordered the state Employment Security Commission to stop docking unemployed North Carolina residents for jobless benefits that they mistakenly received this year.

"I continue to believe that people who are receiving unemployment benefits and are living on $250 a week cannot afford to have a repayment program," Perdue said.

The governor said the ESC should waive all overpayments, halt deductions from people's weekly benefit checks and not cash any checks people have sent in to repay what they owed the state.

A computer programming error led to overpayments to about 38,000 people receiving a second year of benefits, according to ESC officials. 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.

Perdue stepped in to negotiate a deal between the ESC and the U.S. Department of Labor to resolve the overpayments issue. ESC officials said they still need to work out a plan to repay the money to the federal government.

"We are going to do whatever it is that is legal to provide our folks with a waiver and whatever it is that I can do to make sure that nobody has to hold themselves accountable for that $28 million," Perdue said.

ESC Chairwoman Lynn Holmes said that the agency also is figuring out how to refund people who already had money deducted from their checks. Each claim needs to be reviewed individually, officials said.

"The ESC has worked diligently to correct this error,” Homes said in a statement. “The good news is that claimants affected by the overpayment will no longer have money taken out of their weekly benefits.”

Many people complained that the ESC offered poor and confusing explanations about what happened in the situation.

Holmes acknowledged Thursday that communication needed to be improved, but this wasn't the first time the ESC has been criticized for being slow to respond to questions.

Perdue said it's too early to say whether any changes need to be made at the agency.

"We are continuing to work through how it happened (and) what happened," she said. "Before I make any determination about personnel, my first job is to get the whole situation resolved."

A list of common questions about the overpayments issue is expected to be posted on the ESC website by Friday night, and the agency also is keeping its phone lines open until 8 p.m. on weekdays and from 8 a.m. to 5 p.m. on weekends to answer questions. The agency can be reached toll-free at 888-737-0259.