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While Arizona just started issuing unemployment overpayment waivers last month, Michigan has waived more than $555 million

State agencies are allowed to waive overpayments of pandemic-era unemployment benefits in certain situations. DES just started waiving overpayments last month.

PHOENIX — The Arizona Department of Economic Security has flagged thousands of Arizonans for being paid too much in pandemic-era unemployment benefits. 

DES considers at least 56,000 Arizonans as "non-fraud overpayments", meaning an estimated $60 million was paid out by the agency through no intentional fault of the claimant. Some Arizonans are already getting bills that DES thinks they need to pay those benefits back. 

The U.S. Department of Labor does allow state unemployment agencies to waive those bills in specific situations if people were overpaid through no fault of their own. 

However, a DES spokesperson tells 12News that the agency just started implementing overpayment waivers in November 2022. DES refused to tell 12News how many waivers have been granted. 

DES did not establish its overpayment system until February 2022, months after federal unemployment benefits ended, according to an Arizona State Auditor General report. 

In addition, that report found DES has yet to determine if another 108,000 Arizonans were overpaid by the agency. 

RELATED: Audit lays out major issues with Arizona DES' distribution of unemployment benefits 

"At the forefront of our minds is the impact overpayment situations can have on claimants. DES is committed to ensuring that we do all we can to assist claimants in these situations while following federal and state laws," a DES spokesperson told 12News in part. 

12News has requested an interview with DES Director Michael Wisehart on this topic at least a dozen times since August. An overwhelming majority of those requests have been ignored by the department. 

Michigan waives more than $555 million in overpayments

In 2022 alone, Michigan's Unemployment Insurance Agency has already waived more than $555 million in overpayments, according to Julia Dale, the agency's director. 

"It's a lot of money," Dale said. "And when we think about how that money impacts Michigan households, how it impacts workers and how they're able to pay for housing, and to put food on the table or to buy necessary prescriptions, we understand that those overpayments are significant, and behind each waiver is a claimant right with their own story." 

In total, more than 76,000 waivers have been issued by Dale's staff. Dale notes that it's a heavy lift for her staff, but a worthy cause. 

"Where there was an opportunity to acknowledge that agency error and issue waivers, I believe it's upon the agency to do so," Dale said. "Our hope is, one, obviously to bring relief to Michigan workers, but it's also to rebuild, I think, confidence in the agency."

Dale took over as the agency's head more than a year ago, after 11 directors in as many years. 

As for how easy it was for people to be overpaid in the federal Pandemic Unemployment Assistance (PUA) benefits, Dale said, not only were more people, who weren't usually eligible for unemployment benefits, made eligible with the federal programs, but the guidelines were changing often.

"The communication and the guidelines for those did shift over time from the federal government, you know, what was initially provided in the beginning, and then you would see a shift a couple months later, regarding program guidelines," Dale said. "And that's confusing." 

Still though, the federal pandemic-era programs are also believed to have been widely targeted by fraudsters, which Dale says, is being looked into by the agency as well. 

"We also have a team and investigations, you know, and fraud division that is focused on rooting out those bad actors," Dale said. 

Regarding fraud, Dale said, 90 people have been charged, with dozens of more cases pending. In addition, Dale said 28 people have already been found guilty of unemployment fraud crimes. 

Dale said her team continues to work both root out fraud and waive overpayments for people who needed the money in the first place. 

In addition, the department reports $17.9 million of the $555 million in waivers are paying those back who had already started to pay back overpayments to the Unemployment Insurance Agency. 

"We understand the need and the relief that it provides to a worker when we're able to issue that waiver," Dale said. 

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