If you’re receiving unemployment insurance benefits, you should be careful to keep track of the payments you receive.  Iowa Workforce Development has reserved the right to recover any overpayment they have made to you.  They might arrange an installment plan for you to pay them back, but they might deduct it from payments you receive in the future.  If you’re overpaid by $50 or more, IWD can garnish your state tax refund or lottery prize.

Claimant Inesia Bogan was the unlucky recipient of an overpayment in 2012 that she has to pay for nearly two years later.  She was originally found eligible for unemployment benefits, but an administrative law judge later reversed that decision.  The amount of benefits that she received between those two decisions was an overpayment of $1,302.

On August 30th, 2012, IWD determined that Ms. Bogan’s income tax refund could be withheld to collect the overpayment.  This decision and the decision that she was ineligible for unemployment benefits were affirmed.  Because Ms. Bogan did not appeal either, both decisions became final.

Ms. Bogan was sent three overpayment statements, two in 2012 and one in 2013, both stating that her income tax refund could be withheld to collect the overpayment.  She did not make any payments.  Ms. Bogan’s reason for not paying was that she believed that it would have been unfair for her to have to repay funds that were paid to her and which she received in good faith.

On March 3, 2014, an Administrative Law Judge Lynette A. F. Donner decided that the law was quite clear on this issue: it doesn’t matter whether someone received an overpayment in good or bad faith, IWD has the authority to withhold overpayments of benefits.  In her decision, the Judge didn’t appear to give much weight to Ms. Bogan’s argument: there is just a statement of Ms. Bogan’s argument, a section quoting the law verbatim, and then the conclusion that under the law, Ms. Bogan’s income tax could be withheld for the overpayment. 

There are a few possible reasons for this.  First, the law was very clear and exacting, especially when contrasted with Ms. Bogan’s argument which was basically “it’s not fair”.  Secondly, the fact that she did not appeal decisions she could have appealed, along with the fact that she apparently ignored notices telling her the overpayment might be seized, may have led the judge to believe that she lacked credibility.  Thirdly, she didn’t hire a lawyer.  A lawyer might have told her that her appeal was a waste of time and money, or might have come up with a more concrete argument for her than “it’s not fair.”

In any case, Ms. Bogan’s ordeal provides an important lesson for anyone applying for or receiving unemployment benefits: keep track of the payments you receive, and try to ensure that you’re getting paid the right amount.  Remember that if there is a mistake and you get overpaid, you will be liable for repayment.  And if that happens to you, act quickly and respond to the notices you receive so you can clear up that debt quickly.

I like to say to my clients, "Help me to help you."  If we can help you call the Lombardi Law Firm to speak with attorneys Steve Lombardi and Katrina Schaefer. We can be reached at 515-222-1110 or by emailing us at [email protected] and [email protected] We look forward to your call.

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