Overpayments

Overpayments occur when it is found that you were not eligible for benefits you already received.

This may be due to:

  • Failure to accurately report earnings during your benefit year
  • An audit of your account
  • A job separation issue
  • Correction of base period wages
  • An appeal decision which finds you ineligible for benefits you have already been paid
  • Applicant Fraud - You have committed fraud if you knowingly misrepresent or fail to disclose requested information, or by making false statements (whether intentional or not) to receive benefits.

Regardless of the cause, you are responsible for repaying the overpaid amount. If a determination results in an overpayment, the amount of the overpayment will be included in the determination letter.

Keep the address on your account up-to-date for at least four years after your last request for a benefit payment. Even after you stop requesting benefits, your account may be audited or we may need to contact you for other reasons. If we can’t reach you, audit findings will be made without your input, and you will be responsible for any overpayments that might result.

What collection efforts will be used to recover a non-fraud overpayment?

To avoid collection efforts, you can:

  • simply repay the overpaid amount to the department, or
  • call us to establish a department approved payment plan for full repayment.

Otherwise, collection efforts include:

  • Offsets (deductions) from future benefits payable if the overpayment is:
    • Caused by failure to report deductible earnings or deductible payments, 100 percent of your weekly benefit amount until overpayment is totally recovered.
    • A non-fraud and non-earnings overpayment, 50 percent of weekly benefit amount until overpayment is totally recovered.
  • Intercepting Minnesota State Tax refund, lottery winnings, property tax credit, or rent credit.
  • Garnishment of earnings from your employer.

See fraud overpayments below for a list of collection efforts used to recover a fraudulent overpayment.

I’m appealing my overpayment, why do you keep sending me monthly billing statements?

Regardless if your overpayment is being appealed, we will continue to send monthly billing statements until the overpayment is resolved.

Can an overpayment be waived if I’m having financial difficulties?

Under Minnesota law, there is no waiver of overpayments on unemployment insurance.

Why does the total overpayment amount include the money that was withheld for child support, state tax withholding and federal tax withholding?

Even though you did not receive the money withheld for child support, state tax withholding and federal tax withholding, you are still overpaid the entire amount because payments withheld are paid on your behalf to fulfill your other obligations (child support and/or tax withholding).

Fraud Overpayment

If you have a fraud overpayment, you are not eligible for unemployment benefits until the week after your fraud overpayment, penalties and interest are paid in full. For an explanation of what applicant fraud is, see Applicant Fraud.

Penalties and Interest

A monetary penalty of 40 percent of the total amount overpaid is assessed on all overpayments established as a result of a fraudulent act. In addition:

  • Interest is added to any outstanding overpayment or penalty amount at a rate of 1.0 percent per month.
  • An additional administrative penalty of ineligibility of up to 104 weeks may be assessed for false representation or concealment of facts.

Collection Efforts Used to Recover Fraudulent Overpayments

To avoid collection efforts, you can:

  • simply repay the overpaid amount to the department, or
  • call us to establish a department approved payment plan for full repayment.

Otherwise, collection efforts used to recover fraud overpayments include:

  • Intercepting Minnesota State Tax refund, lottery winnings, property tax credit, or rent credit.
  • Intercept IRS tax refunds through the Federal Treasury Offset Program (TOP).
  • Garnishment of earnings from your employer.
  • Court-ordered restitution
  • Referral to the Department of Revenue Collection Division or an outside collection agency. This will add collection costs of 17 percent to the total debt.
  • Filing a lien against your non exempt assets which could have a negative effect on your credit rating.
  • Seizure of funds from your bank account.

Can the 40 percent monetary penalty and interest be deducted from future unemployment benefits?

No, under Federal Unemployment Statute, the 40 percent penalty and interest cannot be offset through your unemployment benefits. In addition, under Minnesota Law, if you have a penalty or interest balance at the beginning of a week, you are ineligible to receive benefits. No payment will be authorized from which to offset your overpayment balance.