The state is trying to recover tens of millions of dollars in unemployment benefits that it mistakenly paid thousands of Texans, many of whom have already spent the money and are struggling to return it.
The Texas Workforce Commission sent 46,000 notices to unemployed workers seeking reimbursement of unemployment benefits that the state says were too high or for which workers were not eligible. But the 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 at Conroe, applied for and received unemployment benefit approval after the school district closed in March and stopped receiving payment. But the first week in June, Rohde received a notice that he owes the state more than $ 1,800 because, under provisions that prevent teachers from collecting unemployment during the annual summer vacation, he was not eligible.
“It made me feel like I was being tricked,” Rohde said.
Overpayments are estimated at $ 32 million so far, according to data provided by the state. It is the latest flaw in an unemployment system that was overwhelmed by claims after mandatory business closings to curb the coronavirus pandemic in late March and the ongoing social distancing measures that have kept many employers operating well below their capacity. According to the Texas Workforce Commission, about 3 million Texans were laid off from work in less than three months, and nearly 650,000 are still waiting for applications for unemployment benefits to be processed.
The agency said it has a team that audits unemployment claims to ensure workers are eligible and receive the correct amount of benefits before checks are issued. But that team may later encounter problems with the benefits that were issued.
“TWC may receive new information that changes the outcome of a claim that may result in overpayment,” said Cisco Gamez, a spokesperson for TWC, 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 suspended from her job as an admissions representative at a for-profit professional skills school. She noted on her application that the school was paying her a stipend of $ 200 per week to supplement unemployment benefits.
The Texas Workforce Commission, however, later interpreted the stipend as severance pay, making her ineligible for benefits at the same time. Now, the commission says she must pay more than $ 600, money she says was quickly spent on groceries, rent, and other needs of her family.
“I said I got the $ 200,” said Vargas, who explained that he followed his employer’s instructions. “So how is that my fault?”
Jeff Larsen, an attorney for 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 tried to solve the problem, but was stuck on the phone with Texas workforce commissions for hours.
During a two and a half hour phone call with a representative, she was transferred to a manager and then the line was disconnected. She could not return.
“I just lost hope completely,” said Vargas. “I can’t be on the phone all day trying to contact someone when nobody is helping me.”
Gamez, the TWC spokesman, said in a statement that Texas law prohibits people from qualifying for unemployment benefits when they receive certain types of compensation.
“You must report any severance pay,” Gamez said in a statement. “We made a decision about whether severance pay affects the claimant’s benefits.”
Vargas lost her job at school forever in May after informing her employer that she was unable to return to the office because her children’s day care centers remained closed. He recently found a new job, but the $ 600 bill is still hanging on his head.
At HoustonChronicle.com: Texans who don’t take care of children can refuse work, receive unemployment benefits
“I want someone to fix it,” he said. “I am saving money for a house, and I cannot continue saving if money is taken from me.”
Confusion and mistakes
Claimants who were overpaid by the state may request exemptions to reimburse the federal benefits provided under the CARES Act stimulus package. The CARES Act expanded unemployment benefits to those who traditionally do not qualify and added an additional $ 600 per week to COVID-19 related claims.
But unemployed workers must pay state benefits if they are overpaid, even if it was the fault of the state.
Dionne Rhalette, who worked for the United States Census Bureau in Fort Worth before being temporarily fired in March, said the error in her claim is the fault of the state, not her fault.
After his dismissal, the Census paid him the following month. When the checks stopped coming, she applied for unemployment benefits in late April.
Since he worked for the government, he was unable to apply for benefits online: the application directed him to call. It took him a month to traverse the overwhelmed phone lines and contact an agent, who took his information and filed the claim. She provided all the required documentation, including pay stubs.
Rhalette, her husband and their three young children depend on their 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 went by without receiving unemployment benefits.
Finally, in early June, he received a balloon payment of more than $ 6,000. Her family paid the rent and the car loan. They caught up on utility bills, bought groceries, and waited for the next check.
It never came. Instead, he received a bill from the state for more than $ 1,800.
“Oh my gosh, what am I supposed to do?” she said it was her first reaction.
The agent who took her claim erroneously reported the information Rhalette provided, incorrectly recording that she stopped receiving checks in March, not April, resulting in the overpayment.
“It is very discouraging,” he said. “It makes you feel like once again the government is failing you.”
‘That’s wrong’
Other challenging overpayment notices feel the same way. They say they are trying to navigate an appeals process not created for an economic disaster of this scale.
Rohde, the substitute teacher, provides an example. In normal times, substitute teachers cannot collect unemployment benefits in the summer or during vacations if they expect to return to work later. But the coronavirus forced schools to close two months earlier, costing her and other substitute teachers wages they would otherwise have earned.
“They are reading the law in black and white and they don’t see this as a disaster,” said Rohde. “I was really out of a job. This is not normal.”
The law does not give the Texas Workforce Commission much leeway, even in extraordinary circumstances. The law requires the commission to recover overpayments. There is no statute of limitations on debt or exceptions for difficulties.
At HoustonChronicle.com: Texas Postpones Job Search Requirements For Unemployment Benefits As COVID-19 Cases Increase
Claimants can appeal state determinations that they were overpaid. Experts say an appeal is almost always worth filing.
“If anyone has any doubts about the validity of an overpayment claim, I would say to file an appeal,” Larsen, the legal aid attorney. “Nothing terrible happens if you lose.”
Rohde recently received an email response from a TWC representative who wrote that her overpayment notice may have been sent in error, and someone is checking it. In the meantime, you are paying the minimum amount ($ 120 per month) and filed an appeal.
If you were not eligible, Rohde said, the agency should have denied your claim. To approve claims, pay benefits, and then request them back months later is not fair, she said. “It is just wrong.”
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