For months, TJ Finney stared at a $10,000 bill.
He made no payments, ignored collection letters and waited for the error to be corrected.
Then one day last week he disappeared.
The Remus resident logged into the Michigan Unemployment Insurance Agency portal and saw that his $10,000 overpayment was gone. Instead of a “make payment on the outstanding balance” shout, Finney only saw an option to file a new claim.
“Really happy,” he said. “A lot of relief”
Finney, an oil driller who works in Texas half the year, wasn’t the only one breathing a sigh of relief. More than 55,000 Michiganders who were asked to repay their pandemic unemployment benefits — through no fault of their own — were granted waivers to clear the debt last week.
Many more, however, are still waiting.
Related: Michigan wipes out $431 million in pandemic unemployment overpayments
The problem stems from an error involving the state and federal governments.
During the pandemic, federal CARES Act dollars have bolstered assistance and extended benefits to people who would not normally qualify, such as part-time workers and gig workers, through the assistance program. unemployed in the event of a pandemic.
But Michigan has allowed workers to claim those benefits for reasons that have not been approved by the US Department of Labor. As a result, the state determined nearly 700,000 people were overpaid and demanded reimbursement for three-quarters of them.
Michigan has since been working with the US Department of Labor to clear the overpayments.
For Saúl Ulloa, he saw his lifeline become a burden.
After losing his job as a research assistant at Georgetown University in the spring of 2020, Ulloa returned to his hometown of Grand Rapids. He turned to Michigan’s UIA for help, collecting benefits for several months to stay afloat until he landed a new job.
Then, last June, Michigan’s UIA notified Ulloa that his eligibility had been redetermined: he now owed the state $12,000.
“It was stressful for many reasons,” he said. “A resource that I had seen as a safety net in times of crisis was being pulled out from under me and many people as well.”
After being threatened with wage garnishment, making two state payments totaling $375, filing a protest and being emotionally drained for months, Ulloa’s overpayment was unexpectedly cleared.
A letter made it official: your overpayment is reversed based on an agency error.
“I’ve had this overpayment hanging over me since June of last year, almost a year,” Ulloa said. “It took them this long to review my account and make some sort of final decision, frankly to me, it was nonsense.”
Related: Michigan can waive more unemployment bills under new federal guidelines
Waivers have been slow to arrive for thousands of people hit with an overpayment notice.
After Michigan settled 350,000 initial overpayments in August last year, state officials asked the US Department of Labor for additional waivers. When broader guidelines arrived in February, the state began testing its system and determining who is eligible for a waiver.
“States have paid benefits – in some cases – to people who were not entitled to receive them, even though those people were not at fault,” the US Department of Labor said in a press release. announcing exemptions.
On May 4, the second track was released, clearing $431 million in debt.
“To date, the UIA has waived over $4.3 billion in overpayment debt for over 400,000,000 claimants with more to come,” a press release read.
About $11 million will also be refunded to people who repaid the overpayment.
Related: The Michiganders are still facing high bills following an error by the unemployment agency. Experts fear their tax returns will be seized.
For Melissa, a Michigan massage therapist who requested that only her first name be used out of concern for her business, she is still waiting for her $18,000 bill to clear. She felt like she had no choice but to rely on benefits to keep her business alive.
“I am the person the waiver would be for. I did nothing wrong. I followed the rules,” she said.
The state agency has not confirmed the number of eligible people who are still awaiting a waiver.
Michigan UIA Director Julia Dale initially told lawmakers in a joint state House and Senate Oversight Committee hearing that 96% of those eligible for waivers would have their overpayments wiped out. . But the “conditional number” overlapped with waivers issued last fall, meaning only 55,000 received a notice in their MiWAM and a letter in their mailbox last week.
There is no timeline yet on when the rest of the overpayments will be reversed, according to Michigan Department of Labor and Economic Opportunity spokeswoman Lynda Robinson. But state officials said in a recent court filing that could take until February 2023.
“I just think it puts everyone in a very difficult position. Especially the group of people who are going through this are the self-employed, small businesses, hairdressers, massage therapists, people of that nature,” Melissa said. “We make a living and we are passionate about it. But I don’t think we were rolling in the money.
A January class action lawsuit argues the state acted unlawfully when it sought reimbursement for pandemic benefits. The defendants filed a motion in March to suspend collections such as wage garnishment or interception of tax refunds, which the state has contested.
Meanwhile, frustration is mounting for thousands of people likely still struggling with an overpayment notice.
“I don’t believe there will be a resolution,” Melissa said. “And if so, I don’t know if it will be appropriate.”
Learn more about MLive:
Michigan suspends pandemic unemployment overpayment collections through May
Michigan unemployment agency illegally demanded reimbursement, class action claims
Whitmer signs bill to pay $140 million into Michigan’s unemployment fund