Overpayments

Overpayments occur when you receive benefit payments you were not eligible to receive.

This may be due to:

  • An audit of your account
  • A job separation issue
  • Correction of base period wages
  • Not reporting earnings accurately
  • An appeal decision which finds you ineligible for benefits you have already been paid
  • Applicant Fraud

Regardless of the cause, you are responsible for repaying the overpaid amount of benefits to the Minnesota Unemployment Insurance (UI) Program. A notice of overpayment will be mailed to you when an overpayment is determined. If you are not requesting benefits at the time the overpayment notice is sent, contact customer service to set up a payment plan to repay the debt in a reasonable period of time. A billing statement will be sent to you each month until the overpayment is resolved.

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?

  • Deductions from future benefits payable if the overpayment is:
    • Caused by failure to report deductible earnings or deductible payments, 100% of your weekly benefit amount until overpayment is totally recovered.
    • A non-fraud and non-earnings overpayment, 50% of weekly benefit amount until overpayment is totally recovered.
  • Establishing a department approved payment plan for full repayment.
  • Intercepting any Minnesota State Tax refund, lottery winnings, property tax credit, or rent credit by filing claims with the Minnesota Department of Revenue under the Revenue Recapture Act.
  • 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 ineligible for unemployment benefits until the 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% 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 1.5% per month.
  • An additional administrative penalty of ineligibility of up to 104 weeks may be assessed for false representation or concealment of facts.
  • Some cases are prosecuted under Minnesota Statutes that provide for prosecution of felony theft which may include penalties of up to a $10,000 fine and/or 10 years in jail.

Collection Efforts Used to Recover Fraudulent Overpayments

Collection efforts used to recover fraudulent overpayments include all of the above non-fraud overpayment collection efforts and:

  • Court ordered restitution after felony prosecution by the County Attorney.
  • Referral to the Department of Revenue Collection Division or an outside collection agency. This recourse adds collection costs of 17% of the total debt.
  • Filing a lien against the overpaid individuals’ non exempt assets which could also adversely affect the individual's credit rating.
  • Seizure of funds from the overpaid individual's bank account.

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

No, under Federal Unemployment Statute, the 40% 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.