DETROIT (WXYZ) — Hundreds of thousands of Michigan residents are receiving notices that they must repay unemployment benefits they received during the COVID-19 pandemic, with collections set to resume as soon as the end of this month.
The Michigan Unemployment Insurance Agency says approximately 350,000 Michiganders will have to return pandemic-era unemployment benefits beginning Friday. The state is seeking to collect $2.7 billion from families who were overpaid during the pandemic.
Watch Evan Sery's video report below:
"Attention, claimant," David Hotz read from an email he received. "You are receiving this notice because you may have an outstanding balance owed to the Michigan Unemployment Insurance Agency."
Hotz is among the hundreds of thousands of Michigan residents wishing they didn't have to read such notices.
"At first, you're like is this real? Usually only get letters in the mail from them," Hotz said. "Then you got an idea it's real. It's like why did they wait two years to contact you."
UIA spokesperson Nick Assendelft acknowledged the timing may come as a surprise to many recipients.
"We understand for some, it'll come as a shock. Others are facing hardships," Assendelft said.
Collections resume after legal settlement
The collection efforts had been paused due to legal action. In 2022, a class action lawsuit was filed against UIA, claiming the agency was attempting to recover overpayment benefits unlawfully.
The lawsuit ended in May with a $55 million settlement. Because of a preliminary injunction, there had been a pause on collecting overpayments. That pause is lifted Friday.
"It depends on whether they remember we sent them an original notice or had been paying back that previous money and were told to stop," Assendelft said.
Cristine Wasserman, a Flint attorney who has worked on unemployment cases, said the pandemic created complications that make collection efforts challenging.
"You had federal people involved in the administration of unemployment events, we had an overwhelmed and antiquated unemployment system trying to administer benefits as quickly they could," Wasserman said. "Realistically, I know they're saying $2.7 billion — they're not going to recoup that much money."
Financial hardship for recipients
For Hotz, the timing couldn't be worse. He has developed health issues since receiving benefits in 2020 including fibromyalgia.
"Unfortunately, I've been developing health issues, fibromyalgia, other health issues," Hotz said. "If they were to contact me even a year ago, I could afford to handle that. Right now, I can't. I'm on Medicaid, dealing with health issues."
The attorney said these emails are going out to everybody who received benefits, not only those who were overpaid. She advises anyone receiving the email to check their UIA account immediately to see if they even owe anything.
Both Wasserman and the agency say applying for financial waivers is an option if recipients can't afford the back payments.
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