Michigan unemployment benefits secure for those who ‘followed the rules’

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Gov. Gretchen Whitmer is offering an answer to the 648,000 Michigan residents wondering if a change in unemployment regulations means they’ll have to requalify for, or pay back, benefits determined to be improperly paid.

In many cases, it will be no.

“No one who followed the rules and received (mistaken) benefits through no fault of their own should have to pay back money to the federal government,” Whitmer said in a statement Tuesday.

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The state’s Unemployment Insurance Agency sent letters in June to nearly 700,000 people, representing just over one-third of the 1.9 million people who received Pandemic Unemployment Assistance (PUA), telling them some criteria had changed for the benefits retroactively back to April 2020.

The reason: four criteria the state established for eligibility for PUA — approved early in the pandemic to help part-time, self-employed and “gig” economy workers — no longer qualified as a legitimate reason for payments, even as the U.S. Department of Labor added additional reasons that would make people eligible. 

Because of all the changes, Washington notified Michigan that all residents who had filed claims based on criteria that no longer applied had to update their claims. That prompted the state’s three-page letter in June. It gave claimants 20 days to make changes themselves or let the UIA determine them. 

Buried in the maddening bureaucracy is a dash of irony. It turns out that the new federal labor eligibility criteria were similar to the Michigan criteria that were nixed — just not quite similar enough for federal regulators. So those who revised their claims found themselves citing similar claims as they had initially.   

The state letters in June prompted worry that people who’d collected benefits in some cases well over a year ago would have to pay them back to the state. Some were fearful that the waiver process wouldn’t work, while the Legislature initiated another call for UIA officials to appear before the House Oversight Committee, saying the move was another sign that mismanagement seemed to be happening within the agency.

The bureaucratic step of sending the letters to each individual was necessary, Whitmer said Tuesday.

“The State of Michigan was required by the federal government to send letters requesting residents recertify their claims based on discontinued and new eligibility reasons,” she said in the statement. “This was an important effort to keep our state in compliance with federal guidelines and also protect taxpayers against fraud.”

While some people will go through the determination process and learn they weren’t eligible for benefits that had been paid to them, Whitmer said the federal government’s waiver guidance issued on May 5 will take effect as long as the original statements were made in good faith. 

“We expect to utilize the waiver process that was granted by the federal government to ensure that you are made whole,” Whitmer told recipients in the statement.

Meanwhile, another 40,092 Michigan residents received the letter who’d been ruled ineligible when they first applied for benefits using the now-obsolete list of criteria. Instead of facing a possible notice that they were overpaid, some may learn they were eligible for benefits and will be paid retroactively.

The deadline for individuals to go into their online accounts to choose a new reason for the benefits, a process called self-attesting, was Monday. 

Liza Estlund Olson, acting director of the UIA, said the state will evaluate each account starting this week, including determining what criteria fits a claim if someone missed the deadline. It is ready to send updated letters of determination to all of the affected people. A separate letter will be sent with information on the waiver. 

“We’re working as quickly as we can to efficiently process the requalification requests,” she said.

Undetermined, Olson said, is how many people completed their self-attesting by the deadline. As a result, there is no firm deadline for resolving the changes, as the state will have to. “Depending on the type of responses we receive, we expect to have them done in about 30-60 days,” she said. 

While some of the cases already have been closed, others will involve ongoing claims with people who are still receiving the benefit payments. 

Olson said those people should not see a pause in their payments while the state sorts through the reclassifications.

About $5.8 billion has been paid in PUA benefits to Michigan residents since April 2020.