Nebraska Recovering Unemployment Debt

The Nebraska Department of Labor (NDOL) has implemented a program to recover millions in unemployment insurance debts owed by current and former Nebraska residents.

Nearly 14,000 individuals were sent letters requesting that they pay back benefits they received due to fraud or wage reporting errors. If they do not, their debts will be transferred to the Treasury Offset Program (TOP), which allows the US Department of the Treasury to reduce or withhold their federal income tax refunds up to the amount of the debts owed.

“The NDOL has a track record of collecting overpayments and we have been offsetting through state tax refunds for years,” said Commissioner of Labor Catherine D. Lang. “We are collaborating with the federal government to step up efforts to improve unemployment insurance integrity even further.”

Funds that are recovered will go back into the Unemployment Insurance Trust Fund.

“This is a big plus for both employers and job seekers because the balance in this fund directly affects unemployment insurance tax rates and the amount of funds available for those who legitimately qualify for benefits,” Lang said.

The move is part of an ongoing effort by the NDOL to improve benefits integrity, meet federal performance requirements and reduce and prevent fraud. Fraud includes intentionally providing misinformation regarding employment, such as not reporting wages received while collecting benefits.

The NDOL’s Benefit Payment Control Unit is responsible for maintaining the accuracy of payments.

TOP is authorized by the Debt Collection Act of 1982 and the Debt Collection Improvement Act of 1996. The Program Integrity Act of 2008 allows for overpayment of unemployment insurance fraud debts to be submitted to TOP.

The Claims Resolution Act of 2010 was expanded to include all unemployment insurance debts incurred as a result of the debtor’s failure to report earnings, regardless of the age of the debt.

Everyone who owes an unemployment insurance debt was notified by mail and given until February 6, 2013 to pay their debt in full and avoid being transferred to the TOP program.

These individuals were also given the opportunity to review their overpayment to ensure the accuracy of the Department’s records.