by Scott McClallen

(The Center Square) – The Michigan Unemployment Insurance Agency says it will waive about $431 million it overpaid to more than 55,000 Michiganders in federal pandemic unemployment benefits.

About $11 million will be refunded to claimants paying back their federal benefits overpayment, or it will be applied to any outstanding debt.

UIA has notified claimants who received waivers via their Michigan Web Account Manager (MiWAM) accounts and will also mail letters.

“This is a huge weight lifted off so many Michiganders’ shoulders,” Gov. Gretchen Whitmer said in a statement. “No Michigander who did the right thing when applying for benefits should be required to pay anything back resulting from errors at the federal level.”

However, emails show the federal government warned the UIA twice before it violated federal COVID rules. Since March 2020, repeated UIA mistakes have cost taxpayers more than $8.5 billion out of the $39 billion in benefits the UIA has paid to more than 3.3 million workers.

When Whitmer shuttered the economy in 2020, Michigan’s unemployment rate jumped to 22.7%.

Michiganders shut out of work overwhelmed the UIA with unemployment claims. The embattled agency overpaid benefits, paid out fraudulent benefits – including one person who claimed to be “Kimberly Kardashian” from Traverse City – and hired people convicted of armed robbery and identity theft to disburse billions of dollars on the UIA’s behalf. A March audit found that the UIA’s lax security protections cost taxpayers as it didn’t screen 5,508 workers before hiring them. About 169 workers had one or more misdemeanors and/or felonies, and 47 workers had one or more felony convictions.

The UIA has fired or penalized at least 18 employees so far. Of 139 departed workers, 63, or 45.3%, continued to have access to Michigan’s Integrated Data Automated System to view and make unauthorized claims for an average of 32.6 days post-departure.

This access cost taxpayers $3.8 million in fraud committed by a former worker who pleaded guilty to fraud in July 2020 but aimed to net over $12 million.

The audit “identified 21 (52.5%) workers who reportedly worked between 2 and 329 hours or an average of 47 hours before completing their initial training,” the audit found.

“This is wonderful news for those who lost their job through no fault of their own,” UIA Director Julia Dale said in a statement. “The federal jobless assistance programs were a critical lifeline for many Michiganders affected by the global pandemic and our action today means they will be able to continue to provide for their families without the fear of having to pay back benefits awarded through agency error.”

Whitmer asked for and received eligibility waivers from the U.S. Department of Labor (U.S. DOL). If the UIA determines fraudulent claims are involved, it won’t waive the claims. The agency says it will attempt restitution of stolen benefits.

The waivers will apply to federal benefits received before September 4, 2021, which is the end of pandemic unemployment benefits programs under the CARES Act that include: the Pandemic Unemployment Assistance, Pandemic Emergency Unemployment Compensation, Federal Pandemic Unemployment Compensation, Mixed Earnings Unemployment Compensation, and federal reimbursement for the first week of benefits.

The U.S. DOL paused some collections through May 7, 2022. The UIA has requested an extended pause while they process waivers.