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An overpayment occurs when unemployment (UI) benefits are paid to a claimant who is later determined not to have been eligible or entitled to those benefits. Because UI benefits were paid to the claimant before a decision or action changed the claimant’s eligibility or entitlement, these benefits must be paid back to the Department of Workforce Development, regardless of fault.
Some of the common causes of overpayments include:
The overpayment notice itself cannot be appealed. The collection of the overpayment is suspended only if the claimant files an appeal of the decision that caused the overpayment. Upon receipt of a timely appeal, the Appeals Section will schedule a hearing and at that time the collection of the overpayment is suspended until the hearing takes place and a decision is written. If the hearing is dismissed due to the appealing party’s failure to participate, the overpayment collection process resumes.
You will receive monthly billing notices and other collection letters regarding the amount owed. Should you become eligible for future UI benefits, 100% of each weekly benefit payment may be applied to the overpayment balance until it is paid in full. You may receive notice of a pending civil action by the Attorney General’s Office and/or your Indiana state income tax refunds and lottery winnings may be withheld and applied to the overpayment. DWD may also forward delinquent accounts to a legal collection agent authorized to apply levies, wage garnishments, etc.
Payments on your overpayment balance can be made in person at the Department of Workforce Development’s Administrative Office at 10 North Senate Avenue in Indianapolis, online at payingov.com/dwd or by U.S. Mail. The Administrative Office will accept payments in the form of a check, money order or exact cash. The Administrative Office is currently unable to accept payments by credit card, debit card, or fund transfers. WorkOne offices will not accept payments; however, they will provide a self-addressed, pre-paid envelope for you to mail your payment directly to the Administrative Office in Indianapolis. It is not recommended that you send cash through the U.S. Mail.
Address the envelope as follows:
Indiana Workforce Development
Trust Fund Accounting – Overpayment
10 North Senate Avenue
Indianapolis, Indiana 46204-2277
Remember to include your Social Security number in your correspondence.
You cannot apply for a waiver of your overpayment until at least one year from the date the overpayment was established or from the last appeal decision. At that time, contact Benefit Payment Control at (317) 232-7496 to see if you qualify for waiver consideration. A showing of financial hardship at the time of the application for waiver is a requirement. Normal overpayment collection activity will occur until a waiver is granted.
If you are overpaid due to a finding of fraud, you are not permitted to apply for an overpayment waiver. If you fail to appear at an appeals hearing, your overpayment waiver will be denied.
Under Indiana Code 35-43-5-7 regarding Welfare Fraud, a person who knowingly or intentionally obtains public relief or assistance by fraudulent means commits a Class A misdemeanor for amounts received up to $250, a Class D felony for amounts more than $250 but less than $2500, and a Class C felony if the amount is $2500 or more.
For the first instance of fraud, a twenty-five (25%) penalty is assessed on the amount of the established overpayment. For a second instance of fraud, there is a fifty (50%) penalty and a one hundred percent (100%) penalty for the third and any subsequent fraudulent overpayments established. Interest will accrue at the rate of one-half (0.5%) per month on the unpaid balance.
Your Indiana state tax refund may be intercepted to pay your overpayment balance. The Department of Revenue will match Social Security numbers with individuals who have an overpayment debt payable to the Department of Workforce Development. If you and your spouse file your taxes jointly, your refund may be intercepted to pay the overpayment debt.
Bankruptcy may relieve overpayment debt if it is included in your bankruptcy filing. An overpayment established due to fraud is usually not dischargeable. DWD will file for an adversary hearing in the bankruptcy court to ensure that the fraud overpayment debt remains. The costs of this action will be added to the overpayment debt.