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OLR Bill Analysis
sSB 417
AN ACT CONCERNING AMNESTY FOR NONFRAUDULENT
UNEMPLOYMENT OVERPAYMENTS.
SUMMARY
This bill creates the Pandemic Unemployment Nonfraudulent
Overpayment Program to help certain claimants who non-fraudulently
received more unemployment benefits than they were entitled to and
now must repay the overpayment. It applies to “affected claimants”
who received these benefit overpayments between March 10, 2020, and
December 31, 2021, and allows them to apply to the new program to (1)
be reimbursed for any repayments they have already made and (2) have
funds transferred from the program to the Unemployment
Compensation (UC) Fund to meet their outstanding repayment
requirements.
The bill requires the Department of Labor (DOL) to administer the
program, process claims, and award assistance to affected claimants. It
creates the pandemic unemployment nonfraudulent overpayment
account to fund the program and appropriates $50 million to DOL from
the General Fund for FY 23 to fund the account. DOL may use up to 5%
of the account funds for administrative costs.
Under existing law, an unemployment claimant who receives a non-
fraudulent benefit overpayment may ask DOL for an eligibility
determination for a waiver from the requirement to repay the
overpayment (see BACKGROUND). The bill requires DOL, by
September 1, 2022, to notify affected claimants who received these
unemployment overpayments, but did not request a repayment waiver,
about their option to do so. It temporarily suspends such a claimant’s
repayment requirement until DOL makes a waiver determination or six
months pass without the claimant requesting one. 2022SB-00417-R000447-BA.DOCX
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EFFECTIVE DATE: Upon passage
PANDEMIC UNEMPLOYMENT NONFRAUDULENT OVERPAYMENT
PROGRAM
The bill establishes the program to offer assistance, within available
funds, to affected claimants on a first-come, first-served basis and
pending eligibility approval.
Affected Claimants & Assistance
Under the bill, someone is an affected claimant if they meet the
following criteria:
1. they received through error any unemployment benefits between
March 10, 2020, and December 31, 2022, (a) while not meeting a
legal condition required for receiving the benefits or (b) in a
greater amount than they should have by law;
2. their receipt of the benefit overpayment was not due to fraud,
willful misrepresentation, or willful nondisclosure by themselves
or anyone else; and
3. they have had a final determination of overpayment made by
DOL that required them to either (a) repay the overpayment
amount to the UC Fund or (b) have it recouped from their
unemployment benefits.
Under the bill, the assistance provided by the program is the moneys
paid from the account established by the bill to help an affected claimant
by (1) reimbursing the claimant for the amount he or she repaid to the
UC Fund or (2) depositing in the UC Fund the repayment amount that
remains outstanding on the affected claimant’s behalf.
Program Administration
The bill requires DOL to administer the program and accept
applications for assistance once the bill becomes effective. It authorizes
DOL to do the following:
1. determine whether an affected claimant is eligible for assistance 2022SB-00417-R000447-BA.DOCX
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and, if so, the amount of assistance that should be provided;
2. summon and examine under oath any witnesses that may
provide information relevant to a claimant’s eligibility;
3. direct the production of, and examine or cause to be produced or
examined, any books, records, vouchers, memoranda ,
documents, letters, contracts, or other papers related to any
matter at issue that it deems proper; and
4. take or cause to be taken affidavits or depositions within or
outside of the state.
Applications
To apply for assistance, the bill requires an affected claimant to
submit a claim to DOL in a form that the department requires. The claim
must include the following information:
1. evidence of (a) DOL’s final determination of overpayment that
requires the claimant to either repay the overpayment or have it
recouped from his or her unemployment benefits, (b) the amount
the claimant has repaid or had offset from his or her
unemployment benefits, and (c) the remaining outstanding
amount and
2. any additional information that DOL requests or requires.
Claim Determinations
The bill requires DOL to promptly review the claims and evaluate
each one to determine whether it should be approved and, if so, the
assistance amount, based on the information the affected claimant
provided or additional information DOL requested. DOL must provide
a written determination to the affected claimant within 60 business days
after receiving the claim notice or, if it requested additional information,
within 10 business days after receiving that information.
DOL must pay the program’s assistance offered to the affected
claimant in the amount and for the time period determined by DOL, if 2022SB-00417-R000447-BA.DOCX
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applicable. Subject to available funds, the amount of assistance offered
to the claimant must be the amount that (1) the claimant has repaid or
had offset from his or her unemployment benefits and (2) remains
outstanding for repayment by the claimant, which must be deposited in
the UC Fund on the claimant’s behalf.
Under the bill, any assistance provided through the program is not
considered income under the state’s personal income tax law,
corporation tax, or any other tax laws.
Appeals
The bill allows an affected claimant to request reconsideration of a
claims determination by filing a request with DOL on a form it
prescribes. The request must be filed within 20 business days after the
determination notice was mailed. Within three business days after
receiving the request, DOL must designate someone to do the
reconsideration and give him or her all documents related to the claim.
The designee must conduct the requested reconsideration, which must
consist of a de novo (i.e., fresh) review of all relevant evidence, within
20 business days after the designation.
The bill requires the designee to issue the decision affirming,
modifying, or reversing DOL’s decision within 20 business days and
submit it in writing to DOL and the affected claimant. The decision must
include a short statement of findings that specifies any assistance to be
paid to the claimant. An affected claimant cannot further appeal a case
beyond this designee’s decision.
Under the bill, DOL may consider any statement, document,
information, or matter or, on reconsideration, its designee may if, in his
or her opinion, it contributes to a determination of the claim, whether or
not the same would be admissible in a court.
Overpayments and Fraud
If a claim is paid to an affected claimant mistakenly or due to the
claimant’s willful misrepresentation, then the bill allows DOL to seek
repayment from the affected claimant. For willful misrepresentation, 2022SB-00417-R000447-BA.DOCX
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DOL may also seek a penalty equal to 50% of the assistance paid because
of the misrepresentation.
Program Fund
The bill establishes the pandemic unemployment nonfraudulent
overpayment account as a separate, nonlapsing account within the
General Fund. The account must contain any moneys that the law
requires to be deposited in it. Account funds must be spent by DOL to
pay for the (1) assistance provided under the program and (2) program’s
operating costs and expenses, including hiring necessary employees
and spending for public outreach and education about the program.
Under the bill, no more than 5% of the total moneys received by the
account can be used for administrative costs, including (1) the cost of
hiring temporary or durational staff or contracting with a third-party
administrator and (2) other connected costs and expenses incurred by
DOL or the third-party administrator. The bill also requires DOL to
make all reasonable efforts to limit the program’s operating costs and
expenses without compromising affected claimants’ access to it.
Report
Starting by January 1, 2023, the bill requires DOL to submit quarterly
reports on the account’s financial condition to the Labor and Public
Employees Committee. The report must include (1) an estimate of the
account’s value as of the date of the report; (2) the effect of scheduled
payments on the account’s value; (3) an estimate of the monthly
administrative costs necessary to operate the program; and (4) any
legislative recommendations to improve the operation or
administration of the program and account.
TEMPORARY SUSPENSION OF REPAYMENT REQUIREMENTS
Notice
The bill requires DOL, by September 1, 2022, to mail written notice to
each person who (1) received through error any unemployment benefits
between March 10, 2020, and December 31, 2022, (a) while not meeting
a condition the law requires for receiving the benefits or (b) in a greater
amount than they should have by law and (2) did not request a 2022SB-00417-R000447-BA.DOCX
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determination of eligibility for a repayment waiver as allowed by law.
The notice must inform the person about the following:
1. the option to request a determination of eligibility for a
repayment waiver;
2. how to request the determination;
3. that the request must be made within six months after DOL sent
the notice;
4. that a final determination of eligibility must be made before the
person can apply to the program under the bill; and
5. any other information labor commissioner deems necessary.
Suspension of Repayments
Under the bill, anyone who is sent the above notice cannot be
required to repay their unemployment benefit overpayment between
the date the notice is sent and the earlier of (1) the date the final
determination of eligibility for a repayment waiver is made in relation
to the notice, if the person requests a determination, or (2) six months
after the notice is sent to the person if he or she does not request a
determination of eligibility by that date.
BACKGROUND
Repayment Waiver
By law, someone who receives non-fraudulent unemployment
benefit overpayments may request a determination of eligibility for a
waiver from the repayment requirement. The waiver may be granted if
the repayment would defeat the purpose of the benefits or be against
equity and good conscience (CGS § 31-273(a)(1)). State regulations
further specify that these conditions exists if, among other things, (1) the
benefits were overpaid as a direct result of gross administrative error,
(2) the person’s annualized family income is less than 150% of the
federal poverty level, or (3) the benefits were overpaid as a direct result
of an employer’s failure to timely or adequately respond to a request for
information from DOL about the person’s claim (Conn. Agencies Regs., 2022SB-00417-R000447-BA.DOCX
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§ 31-273-4).
COMMITTEE ACTION
Labor and Public Employees Committee
Joint Favorable Substitute
Yea 9 Nay 4 (03/24/2022)