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LAW Home > Legal Topics > Jobs and Employment > Unemployment Insurance > Overpayment

How to Apply for Waivers of Pandemic-Related Unemployment Overpayments



Many recall the chaos of the unemployment system when the COVID-19 pandemic hit and the New Jersey Department of Labor (NJDOL) was overwhelmed by an unprecedented number of new claims. At the same time, an entirely new system was rolled out for workers ineligible for traditional unemployment benefits. Combined, this left people in very challenging, if not desperate, situations.

The NJDOL issued payments quickly to help as many unemployed workers as possible. But, they did not always conduct a complete and timely analysis. Thousands received benefits only to be deemed ineligible months or years later. Worse, they were told to return the benefits they received. Receiving a “Notice of Refund” for thousands of dollars, often long after benefits are exhausted, can be distressing and financially devastating. The requirement to repay can sometimes be waived, but claimants have been waiting for guidance on how to apply for these waivers.

Fortunately, the United States Department of Labor (USDOL) understands that there were a lot of problems in the unemployment process when the pandemic hit. The USDOL also understands that many claimants received benefits when they shouldn’t have, and not because of something they did wrong. As a result, the USDOL is allowing states to waive certain pandemic-related overpayments. This includes overpayments of benefits received under the Pandemic Unemployment Assistance (PUA), Pandemic Unemployment Compensation (PUC), and Pandemic Emergency Unemployment Compensation (PEUC) programs.

The availability of a process for claimants to apply for waivers is very good but, unfortunately, there is no process for granting waivers automatically. Claimants have to inform the NJDOL that they want a waiver. The waiver process is new, so we do not yet have all the details, but here’s what we know so far:

Eligibility for pandemic-related waivers

To get a waiver of a pandemic-related overpayment, you must show two things:

  1. That the overpayment was not caused by something you did wrong, and
  2. That repaying the debt/overpayment would be very financially difficult or unfair.

So, to be eligible for a waiver, you must be able to say that you didn’t lie about anything or withhold any information from the NJDOL in your application for benefits. You also have to show that you can’t afford to repay the money or that having to repay the money would be unjust. We don’t yet know what types of financial information the NJDOL will ask for to show financial hardship, but we predict that claimants will have to provide information about their income, assets, and ability to work.

Applying for a waiver of overpayment

To apply for a waiver of overpayment, you should go to the NJDOL’s unemployment website and click on “check claim status.” Once you get to your account information, check off the box for “request waiver application.” Then, the NJDOL will email you a questionnaire about your waiver request. The questionnaire will ask about your unemployment claim and the reasons you are applying for a waiver.

After you complete and return the questionnaire to the NJDOL, they will review your eligibility for a waiver and send a decision. We do not yet know how long that process will take. It is possible, and even likely, that the process will take several months. If the appeals process is the same as for regular unemployment claims, you could, if denied a waiver, appeal to the Appeal Tribunal. You could then appeal a decision of the Appeal Tribunal by filing a second appeal with the Board of Review. If you want to appeal the Board of Review’s decision, appeal to the Appellate Division of the NJ Superior Court.

Note: If you are unable to access your unemployment account information online, you can send a letter requesting a waiver to the Unemployment Insurance Director at: Greg Castellani Director of Unemployment Insurance, Dept. of Labor, 1 John Fitch Plaza, Trenton NJ 08625. Keep a copy for your records!

If your tax returns were withheld because of the overpayment of pandemic-related benefits

Some claimants have already had their tax refunds taken by the state to repay some or all of the overpayment. If that happened to you, and you are approved for a waiver, you will get that money back. It may take several months for the state to return the money to you, but any money the state took to repay the debt will be given back to you if the waiver is granted.

Note about waivers of overpayments for “regular” (non-pandemic) benefits

The waiver application process described above is only for pandemic- related claims. But claimants may request waivers for overpayments of non-pandemic claims, too. “Regular” (non-pandemic-related) overpayment waivers are a bit different from pandemic-related overpayment waivers, but the process of applying for a waiver is similar. To be eligible for a waiver of an overpayment not related to the pandemic, you must have been completely truthful in your application for benefits, and must show that repaying the money would be very difficult. To request a waiver of overpayment of non-pandemic claims, send a letter to: Greg Castellani, Director of Unemployment Insurance, Dept. of Labor, 1 John Fitch Plaza, Trenton NJ 08625. Be sure to keep a copy for your records! ​​​​​​​