Thousands asked to return jobless aid

Texas seeks to recoup $32M, says claimants were overpaid state unemployment benefits

The state is trying to recoup tens of millions of dollars in unemployment benefits that it mistakenly paid to thousands of Texans, many of whom have already spent the money and face difficulties paying it back.

The Texas Workforce Commission has sent 46,000 notices to jobless workers seeking repayment of unemployment benefits that the state says were too high or for which the workers were not eligible. But people who received the notices say they applied for the benefits and spent them in good faith, approved by the state after navigating a difficult and confusing application process.

Cathy Rohde, a substitute teacher in Conroe, applied and was approved for unemployment benefits after the school district shut down in March and she stopped getting paid. But the first week of June, Rohde got a notice that she owes the state more than $1,800 because, under provisions preventing teachers from collecting unemployment during annual summer breaks, she was not eligible.

“It made me feel like I’ve been tricked,” Rohde said.

The overpayments are estimated at $32 million so far, according to data provided by the state. It’s the latest glitch in an unemployment system that was overwhelmed by claims following mandatory business shutdowns to slow the coronavirus pandemic in late March and the continued social distancing measures that have kept many employers operating well below capacity. Some 3 million Texans were thrown out of work in less than three months, and nearly 650,000 are still waiting for unemployment benefits

“They’re reading the law in black and white and not considering that this is a disaster.”

Cathy Rohde, substitute teacher

applications to be processed, according to the Texas Workforce Commission.

The agency said it has a team that audits unemployment claims to ensure that workers are eligible and receiving the right amount of benefits before checks go out. But that team may later find problems with benefits that were issued.

“TWC may receive new information that changes the outcome of a claim that can result in overpayment,” spokesperson Cisco Gamez said in a statement.

‘Completely lost hope’

Elizabeth Vargas, a single mother of two in Harlingen, near Brownsville, was approved for unemployment benefits after she was furloughed from her job as an admissions representative at a for-profit career skills school. She noted in her application that the school was paying her a $200-aweek stipend to supplement unemployment benefits.

The TWC, however, later interpreted the stipend as severance pay, making her ineligible to collect benefits at the same time. Now, the commission says she must repay more than $600 — money she said was quickly spent on groceries, rent and other needs of her family.

“I did put that I got the $200,” said Vargas, who explained she followed instructions from her employer. “So, how is that my fault?”

Jeff Larsen, an attorney at Lone Star Legal Aid, a legal aid provider in Houston, said Vargas should be eligible for unemployment for lost wages not covered by the stipend. Vargas attempted to resolve the issue but was stuck on the phone with the agency for hours.

During a two and a half hour phone call with a representative, she was transferred to a manager, and then the line disconnected. She couldn’t get back through.

“I’ve just completely lost hope,” Vargas said. “I can’t be on the phone all day trying to get a hold of someone when nobody is helping me.”

Gamez, the TWC spokesperson, said in a statement that Texas law prohibits individuals from qualifying for unemployment benefits when receiving certain types of severance.

“You must report any severance pay,” Gamez said in a statement. “We make a decision on whether the severance pay affects the claimant’s benefits.”

Vargas lost her job at the school for good in May after informing her employer that she could not return to the office because her children’s day care centers remained closed. She recently found a new job, but the $600 bill is still hanging over her head.

“I want someone to fix it,” she said. “I’m saving money for a house, and I can’t keep saving if they pull money away from it.”

Confusion and mistakes

Claimants who were overpaid by the state can request waivers from repaying federal benefits provided under the CARES Act stimulus package. The CARES Act expanded unemployment benefits to those who do not traditionally qualify and added an extra $600 per week to claims related to COVID-19.

The TWC also said it is not deducting overpayments from claimants’ benefits during the pandemic.

But unemployed workers must repay the state benefits if they were overpaid — even if it was largely the state’s fault.

Dionne Rhalette, who worked for the U.S. Census Bureau in Fort Worth before being temporarily laid off in March, said the mistake in her claim is the state’s fault, not hers.

After her layoff, the Census paid her for the next month. When the checks stopped coming, she filed for unemployment benefits at the end of April.

Since she worked for the government, she couldn’t file for benefits online — the application instructed her to call. It took her a month to get through the overwhelmed phone lines and reach an agent, who took her information and filed the claim.

She provided all the required documentation, including pay stubs.

Rhalette, her husband and three young children depend on her earnings and the disability and Social

Security benefits of her husband, who suffers from chronic heart failure. When she lost her job, the family fell behind on utility bills. Weeks passed without receiving unemployment benefits.

Finally, in early June, she received a lump sum payment of more than $6,000. Her family paid rent and the car loan. They caught up on utility bills, bought groceries and waited for the next check.

It never came. Instead, she got a bill from the state for more than $1,800.

“Oh my God, what am I supposed to do?” she said was her first reaction.

The agent who took her claim misreported the information Rhalette provided, incorrectly recording that she stopped getting paychecks in March, not April, resulting in the overpayment.

“It’s very disheartening,” she said. “It makes you feel as though once again the government is failing you.”

‘It’s just wrong’

Others challenging overpayment notices feel same way. They say they are trying to navigate an appeals process not built for an economic disaster of this scale.

Rohde, the substitute teacher, provides an example. In normal times, substitute teachers can’t collect unemployment benefits in the summer or during holiday breaks if they expect to return to work afterward. But the coronavirus forced schools to shut down two months early, costing her and other substitute teachers wages they would have otherwise earned.

“They’re reading the law in black and white and not considering that this is a disaster,” Rohde said. “I was really out of work. This is not normal.”

The law does not give the Texas Workforce Commission much leeway, even under extraordinary circumstances. The commission is required by law to recoup overpayments. There is no statute of limitations on the debt nor exceptions for hardship.

Claimants can appeal determinations by the state that they were overpaid. Experts say it’s almost always worth filing an appeal.

“If anyone has any doubt about the validity of an overpayment claim, I’d say file an appeal,” Larsen, the legal aid lawyer. “Nothing terrible happens if you lose.”

Rohde recently received an emailed response from a TWC representative who wrote that her overpayment notice might have been sent in error, and someone is checking into it. In the meantime, she’s paying the minimum amount ($120 per month) and filed an appeal.

If she wasn’t eligible, Rohde said, the agency should have just denied her claim. To approve claims, pay benefits and then ask for them back months later is not fair, she said. “It’s just wrong.”