Colorado to write off up to $ 1.4M

The Colorado unemployment division is prepared to write- off up to $ 1.4 million it erroneously overpaid people through the federally funded Pandemic Unemployment Assistance program.

The program, known as PUA, was launched in a hurry in Colorado this spring after Congress passed the CARES Act. PUA allows self- employed people, independent contractors and gig workers such as Uber and Lyft drivers who are not eligible for state support to collect unemployment benefits.

Under an executive order from Gov. Jared Polis to rush money into the hands of people who needed it as the COVID- 19 pandemic cratered the economy, the Colorado Department of Labor and Employment started paying people through the program without vetting their paperwork and eligibility upfront, officials say.

As a result, 9,098 people approved for PUA received more in weekly benefits than they should have, according to the labor department. The overpayments were discovered as state officials delved deeper into applicants’ paperwork and tax documents. Those 9,098 cases have added up to $ 1.4 million — about $ 154 on average — that the state overpaid. Now the state is looking to reclaim the overpayments or write them off the state’s books.

The labor department clawback efforts have come in the form of “offsets” where it withholds 50% of a person’s benefits to collect the overpayment total. For people no longer collecting PUA benefits, the state is sending them notices with repayment options, Cher Haavind, the labor department’s deputy executive director, said.

As of last week, the labor department has frozen efforts to collect on those balances, Haavind announced. On Oct. 28, all remaining balances tied to the issue will be written off. In the meantime, the labor department is encouraging people to check the correspondence tab in their online account for information about overpayments and appeals. Even people who have paid back money owed can appeal to reclaim an overpayment.

Haavind said the overpayments largely are the result of paperwork errors, particularly among gig workers who may not be familiar with specific tax figures the state’s enrollment form asked for. The state is working on a clearer form for future enrollees.

“What we’ve realized in the recent weeks is there is some confusion particularly among the gig worker population about requirements with regard to reporting

wages,” Haavind said. “If the claimant indicates to us that the offset was a result of a misunderstanding of the process or that it provides a financial hardship, then that will be considered under a write- off.”

Colorado Public Radio first reported on the issue last week, interviewing an Uber driver who has been notified he owes $ 6,000 in overpaid benefits.

Even much smaller overpayment amounts have put stress on people relying on PUA benefits as the economy struggles and the virus persists.

Steve Johnson, an Uber and Lyft driver with asthma who stopped driving when the pandemic began, said the state started taking offsets out of his benefits in early September.

His benefits dropped from $ 223 a week to under $ 100. In total, he had to pay back just over $ 420, a small amount that had a big impact on Johnson’s life.

“My son and I have a home, have a roof over our heads, but we’ve had to tighten the straps on, just not some things, everything,” Johnson. “It affects the food I buy. Even if it’s just $ 400 to $ 500 dollars, that’s huge right now. That’s huge for my son and me.”

The labor department is allowing people up to 180 days to appeal overpayment decisions. Even people such as Johnson who have already paid back the full amount could see their debts written off if they win an appeal.

But Johnson, who runs a website, Twitter account and podcast dedicated to providing information for gig workers, said he has seen no notices from the state about a possible appeal.

Poor communication has been an issue with the state’s unemployment and PUA systems from the beginning, Johnson said.

He noted the state has had his personal email since he first filed for benefits.

“To never get an email and to never be told about these changes that are huge?” he said “These aren’t little things.”