Frequently Asked Questions about Overpayments
Can I appeal the decision that caused the overpayment?
Your appeal rights, if any in your circumstance, are set out in KSA 44-709 or KSA 77-601 et seq. They are also paraphrased in determination communications provided to you by KDOL relating to the establishment of an overpayment. The time limits set out in the appeals process are strictly enforced. You are encouraged to exercise any right to appeal should you choose to do so. If the time for appeals has passed, the Asset Recovery unit of KDOL is not authorized to discuss appeals. You are encouraged to consult with your legal advisor concerning your appeal rights.
Are there penalties or interest on overpayment amounts?
Legislation permits KDOL to assess a “penalty in the amount equal to 25 percent of the amount of benefits unlawfully received” upon “an individual who has knowingly made a false statement or representation or who has knowingly failed to disclose a material fact to obtain or increase [UI] benefits ...” KSA 44-706. These are generally referred to as “fraud” cases. The failure to fully report or accurately disclose wages or earnings for any time benefits are paid or delivered is fraud. KDOL actively investigates fraud. Fraud can lead to prosecution. For example, KSA 21-5801.
If a fraud determination has been made, interest accrues from the date of final determination. Interest at the statutory rate of 18 percent per year may accrue on penalties assessed.
Non-fraud overpayments accrue interest on unpaid balances remaining unpaid two years after the date the overpayment was established.
What happens if I fail to repay the overpayment?
KDOL has cumulative authority to recover any unpaid Overpayment Account balance under KSA 44-717 & 719. The authority includes lien, levy, civil action, garnishment, warrant, offsets to monies or future benefits, including but not limited to recovery and even seizure of wages or other property. More than one overpayment recovery method may be pursued by KDOL at any time. Obtaining future UI benefits may be affected by your Overpayment Account balance. Recoupment may be applied to recover overpayments.
Future UI benefits, whether in Kansas or out of state, can and may be reduced by amounts to repay (off-set) your overpayment obligations. Also, if your overpayment involved fraud, 100 percent of your future UI benefits may be applied to repay your UI overpayment.
To the extent that you have state tax refunds or other payments payable to you through Kansas State agencies, KDOL may assert an off-set through the Kansas Department of Administration.
The United States Treasury Offset Program (TOP) provides that under specified conditions, KDOL may obtain all or part of your federal tax refund or other federal payments to be applied to your overpayment obligations.
It is in your best interest to maintain a zero Overpayment Account balance.
How can I avoid collection or recovery activity against me?
Keeping your Overpayment Account at a zero balance is the best method to avoid collection or recovery activity. Making an obvious effort to reduce the balance in a reasonable and timely fashion is a good alternative.
How does bankruptcy influence overpayments?
Bankruptcy may not discharge your obligations related to your overpayment account. Overpayment balances are subject to recoupment or off-set including benefit off-set post-bankruptcy. Overpayment balances may prevent future Unemployment Insurance benefits.
Will an overpayment balance influence my credit report?
KDOL does not supply overpayment balances or related information to credit reporting agencies. Some recovery processes are public records available to credit reporting agencies and the general public.
How do I report suspected UI fraud?
Unemployment fraud is the willful misrepresentation of information to collect UI benefits. For additional information and how to report fraud, go to http://www.dol.ks.gov/ui/fraud.aspx.
Are Overpayment repayments tax deductions?
In some cases they may be. You should consult with your tax advisor or tax preparation service. Because UI benefits are generally income, it may be that UI benefit repayments would provide a deduction on income tax returns when repaying prior reported income in the tax year of the repayment.
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