Virginia lawmakers weigh bill to forgive overpayments by state’s unemployment insurance program

Virginia lawmakers weigh bill to forgive overpayments by state’s unemployment insurance program
The bill would forgive an estimated $18 million in overpayments made since March as a result of errors by the Virginia Employment Commission. (Source: Ned Oliver/Virginia Mercury)

A proposal that would halt efforts to claw back millions of dollars in unemployment benefits mistakenly paid to out-of-work Virginians is advancing in the General Assembly — one of the only surviving measures aimed at addressing the state’s struggle to administer jobless benefits amid the pandemic.

The bill would forgive an estimated $18 million in overpayments made since March as a result of errors by the Virginia Employment Commission.

The measure’s sponsor, Del. Sally Hudson, D-Charlottesville, presented the idea as a logical and compassionate alternative to sending already-struggling residents to collections.

“They applied in good faith, they committed no fraud, they received benefits for several months and used them to pay for rent and gas and groceries,” Hudson said. “Then five months later, they got a very scary letter from the state that said you now owe $10,000 back that you don’t have.”

Virginia is one of just 11 states that doesn’t forgive any overpayments, according to the U.S. Department of Labor. The Virginia Employment Commission has taken no stance on the bill, but its staff told lawmakers this week that even if they tried, it was unlikely they would be able to recoup much of the money.

The Virginia Mercury is a new, nonpartisan, nonprofit news organization covering Virginia government and policy.