Texas wants $32 million in unemployment benefits back after finding 46,000 people were overpaid

Editor's note: After the publication of this story, state officials reversed course and said workers won't have to pay back unemployment benefits if the overpayments were the state's mistake.

More than 46,000 Texans who lost their jobs in recent months were initially overpaid by the Texas Workforce Commission, which now wants $32 million in unemployment benefits back.

“State law requires TWC to recover all unemployment benefits overpayments,” Cisco Gamez, spokesperson for the state agency, said in an email. “Overpayments stay on your record until repaid."

It's unclear how many of those overpayments, first reported by the Houston Chronicle, are due to fraud and how many are due to TWC's errors. After a request from The Texas Tribune, the agency is still gathering data on the percentage of overpayments due to fraud.

Overpayments due to their error will be only known at the end of the year, but "errors caused exclusively by TWC are exceptionally rare," Gamez said.

Benefits must be repaid even if the state is to blame for the overpayment, or if it was otherwise not the recipient's fault. If TWC finds unemployment fraud in a case, the person has to give back the benefits and pay a 15% penalty.

Gamez on Monday originally said that the agency cannot pay someone benefits if they have been previously overpaid. But later Monday, he said the agency eliminated that rule earlier this year.

If the person that receives the notification of overpayment doesn't send back the money, the state comptroller can recover the money by withholding certain funds, including lottery winnings, unclaimed property, unemployment benefits and other state job-related expenses. Some state funding for college students cannot be released until a repayment is made in full.

Claimants who have received notices can appeal the process, but TWC can take legal action too if they don’t recover the money.

“There is no statute of limitations on debts owed to the state,” Gamez said on an email. “TWC cannot forgive or dismiss the overpayment and there is no exception for hardship.”

James Richards is one of the people that is being asked for part of his unemployment benefits back. Last year, after a heart attack, he had to stop working as a welder at a company that builds construction equipment in Fort Worth. His supervisor gave him a new job as a janitor but, as business slowed down due to the pandemic, he was let go in late March. Without a salary, he depended on the unemployment checks to pay for his doctor appointments and medication.

“They sent me two checks for $1,700, but then they canceled it and sent me a bill to get $1,700 back,” the 47-year-old said.

According to the correspondence from TWC, they were revoking his benefits because allegedly he left the company on his own. But Richards said that that wasn't the case and is currently appealing. In the meantime, he is depending on his partner's salary as a teacher to pay their mortgage.

“I’m feeling frustrated. This should have never been taken away in the first place,” Richards said. “Now I'm in a position that I can’t afford my truck, I'm not able to go to the doctor, I don't have any of my income. We are just trying to afford the house.”

As of late June, 2.7 million Texans had filed for unemployment relief since mid-March, but TWC has struggled to keep up with the high levels of demand. Since the pandemic started, countless Texans have experienced problems accessing these benefits, encountering busy phone lines and an overwhelmed application website.