Gov. Gretchen Whitmer has said waivers will be requested for people whose claims are now ineligible through no fault of their own. But people testifying Tuesday before the House Oversight Committee said communication from the Unemployment Insurance Agency indicated they owed thousands of dollars, and one is preparing to take out a loan to repay the state.
The House Oversight Committee hearing is the first of several meant to look into issues at the unemployment agency that became heightened during the pandemic as the state sought to balance hundreds of thousands of claims with the implementation of a new federal program and an onslaught of fraudulent claims.
In recent months, much of the controversy at the UIA has revolved around a mass mailing from the state asking individuals to resubmit their qualifications for unemployment aid because of a state error.
"It's unbelievable the treatment that people are going through," said Rep. Steve Johnson, the Wayland Republican who chairs the committee.
Emily Mitchell of Rochester Hills said she never received notice of the new requalification requirements prior to a July 19 phone call. A couple days later, she was informed she owed between $25,000 and $27,000.
The Michigan State University student had been working part-time as an usher in the School of Music before the college shut down in 2020, pushing her to pursue newly available federal jobless aid for part-time, gig and self-employed workers, also referred to as Pandemic Unemployment Assistance.
Mitchell argued she shouldn't be dealing with the fallout from the state's mistakes.
"I am beyond grateful that I was able to qualify for these benefits in the first place and for as long as I needed them due to the pandemic and how unprecedented this all is," she said. "...Now that I'm working full-time, I just want to move on with my life and get on my feet."
The Unemployment Insurance Agency said Tuesday it could not respond to specific situations "without knowing the source of the overpayment" but said it did intend to evaluate most overpayments for waivers.
"The UIA may waive overpayments if they determine that the payment was without fault on the part of the person who applied for benefits," agency spokesman Jason Moon said. "Those who have an overpayment due to PUA requalification, in general, fit into this category and will not have to repay any benefits received."
Some of the mailings to individuals caught up in the state qualification error will indicate an overpayment amount but include information indicating a waiver will be granted, said Moon.
Rep. John Damoose, R- Harbor Springs, introduced a bill Wednesday that would ban the agency from demanding restitution for overpayments made because of any agency error between March 12, 2020 and July 1, 2021. Two of the bill's 13 cosponsors are Democratic lawmakers.
The testimony Tuesday comes weeks after the state of Michigan, in late June, sent notices to 648,100 jobless aid recipients asking them to clarify their qualifications for aid after a state error offered them qualifying reasons the federal government had not approved.
The affected claimants were part-time, self-employed or gig workers who wouldn't normally qualify for benefits but did qualify for pandemic unemployment assistance.
About 350,000 people failed to respond to the notice, but the state said they'll seek waivers for those individuals. Another 241,000 individuals asked to requalify did respond to the state and their requalifications are being processed, the state agency said. It's likely those respondents also won't have to repay any money even if some of them didn't originally qualify.
The new paperwork was required after eligibility criteria the state developed early in the coronavirus pandemic for Pandemic Unemployment Assistance benefits was rejected by the U.S. Department of Labor earlier this year. Instead, the Department of Labor issued three new federal criteria an individual could mark.
Like Mitchell, Alex Hill didn't receive notice of a possible overpayment by the unemployment agency until July 29, on his birthday, when he was "greeted by a slew of messages from unemployment saying that I owed $27,000."
Hill, who went on unemployment in April 2020, said getting answers regarding the agency's letter has been frustrating and agency employees he reached by phone have not understood the letter he received or the steps he should take. He thinks he requested a waiver but is uncertain.
"It's a shame that the people who suffered through this pandemic and relied on unemployment are having to pay for a mistake that isn't our own," said Hill, who didn't indicate his hometown.
Patricia Buck, a self-employed worker in Iron Mountain, has encountered similar frustrations after receiving a letter informing her she owed $14,800 in unemployment aid back to the state because she was determined to have misrepresented her work. Buck said Tuesday she never misrepresented her situation to the agency.
"It was their responsibility to approve the applications, to check credentials and make wise decisions and not flippantly hand out the money and then expect repayment," Buck said.
"What was meant to be financially helpful has created a much bigger problem in my life," she added. "I now have to get a loan to pay them back. ... We didn't take advantage of the system. We got off the unemployment the minute we could."
Lawyer Tony Paris noted the issues with the unemployment system date back to 2012 when the Legislature and former Gov. Rick Snyder shifted claims review from actual employees to a computer system to save money and increase efficiency.
The change led to a software debacle between 2013 and 2015 that accused people falsely of fraudulent unemployment filings. The fallout from that mistake still is being litigated.
Paris said the unemployment problems during the pandemic are a continuation of an overly strict agency using ill-equipped software and poorly trained contract workers.
"We are now faced with a system that was never fixed at all — you take that torn tire and you start pumping air into it in what is now an unprecedented global pandemic," Paris said.
Paris, who works for the Sugar Law Center for Economic and Social Justice, said his group is working with hundreds, if not thousands, of clients experiencing problems with the unemployment system and said he "cannot keep up" with the demand for help.
"Because so many resources and so much times has been put into it — I hate to say this — but me, my clients, your constituents and many of my colleagues start to believe that maybe this system wasn't supposed to be easy," he said. "Maybe it was deliberately designed. Maybe unemployment insurance has a stigma on it. Maybe you're supposed to break government, then you can blame government."
Paris suggested the agency employ more liaisons who can help claimants resolve their claims and problems. Rep. David LaGrand, D- Grand Rapids, suggested an audit of the technology the agency used or an information technology ombudsman who could evaluate the efficacy of the system.
Rep. Julie Brixie, D- Meridian Township, ruminated on the possibility of more funding so the agency could hire 500 more full-time workers.
But Rep. Jack O'Malley, R- Lake Ann, said he believed the system needed to be "razed and rebuilt." He argued one of the causes of the persistent problems at the UIA was the existence of legislative term limits and the limitations it places on "institutional knowledge."
"Guys like me and my colleagues, we're learning every two years so this is always new and that's not good in politics," O'Malley said.
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