If your client has ever applied for unemployment benefits, this could be a problem now or a potential problem you can help avoid. As required by federal law, Louisiana has a process to detect, establish, and recover overpaid benefits.1  The agency may find an error on its own, through a federal audit, or through a third-party complaint. The prescriptive period for collection is currently 5 years (10 for fraud), with generous interruptions allowed.2  The U.S. Department of Labor has performance standards for state recovery efforts and requires states to pursue all means of collection. Clients who get a Notice of Overpayment must timely appeal in order to seek waiver of collection when one is available. The Notice should include a total amount and the week(s) overpaid and indicate whether or not the repayment is being sought due to fraud.

• 1La. R.S. 23:1740, et seq.
• 2See La. R.S. 23:1713(C)(2); La. R.S. 23:1601(8)(b); LAC 40:IV:369, et seq.

If an appeal is timely filed and waiver is not expressly prohibited by the law authorizing the original benefits payment, the issue of waiver of collection should be automatically considered at the hearing. The appeals staff may fail to send out the waiver form ahead of a hearing; that failure can be grounds for postponement or remand for new hearings. Clients interested in seeking waiver should also try to document their expenses, obligations, and limited resources. Only agency rules, not the statute, require supporting documentation. If a client’s testimony was undisputed, agency denials for lack of documentation should be challenged. Denial of waiver on that type of technicality is contrary to the remedial purpose of the UC law.

Waiver should be granted when fraud is not involved, the claimant was “without fault,” and recovery would “defeat the purpose” of the benefits already authorized or would “be against equity and good conscience.”1  The agency’s usual tendency is to find claimants at fault in any way possible. Be prepared to vigorously advocate for your client on this issue. ALJs often wrongly fault claimants for the agency’s subsequent reversal of initial qualification decisions or blame claimants for not submitting documentation of expenses when the claimant’s sworn testimony about them is uncontested. Getting debts waived is a huge benefit, so vigorously pursue that relief unless your client admits fraud.

Fraud overpayments, which constitute a very small percentage of overall benefits paid nationally, require the agency to prove intentional misrepresentation or concealment of a material fact. A finding of fraud has more serious consequences for your client. Waiver of repayment and avoidance of penalties are not options. If you are contesting the fraud allegation, submit a completed waiver form and supporting documentation prior to the ALJ hearing.

• 1See La. R.S. 23:1713(B); LAC 40:IV:371.

Once a debt is final (i.e., administrative and judicial review have been exhausted or never taken), the agency has several collection options:

• Offset from future claims payable (which often happens without written notice, to the puzzlement of those who may have forgotten a long-ago overpayment notice or who are the victim of agency error)
• Civil action
• Offset from state income tax refunds
• Treasury Offset Program (offset from federal benefits)

If your client did not get the agency’s original notice of debt through no fault of their own (e.g., the agency sent the Overpayment Account Establishment Notice to a stale postal or e-mail address) and thus had no timely opportunity to contest the alleged debt, your client has been denied due process, which should enable you to get collection suspended and have an opportunity to effectively contest the debt and/or seek waiver.