Montana Public Radio

State Wants Hundreds Of Unemployment Insurance Payments Returned

Nov 12, 2020

Hundreds of recipients of unemployment insurance through the federal CARES Act are now being asked to give that money back. 

The Pandemic Unemployment Assistance program is designed for gig workers, the self-employed and other groups not normally eligible for unemployment benefits. The Bozeman Chronicle reported Thursday that recipients are now receiving bills, some for more than $10,000. 

Montana Department of Labor and Industry Unemployment Insurance Administrator Paul Martin says the department has identified about 8,800 payment issues, with some recipients accounting for more than one issue. It’s asking that at least 816 Montanans pay the benefits back in full. More than 21,000 Montanans have been paid through the program.

Screen capture from a Montana Department of Labor & Industry FAQ page about unemployment benefits. http://dli.mt.gov/self-employed-contractors
Credit Montana Department of Labor & Industry

Martin says the issues are in part due to the unemployment system not being accustomed to processing and vetting claims from people outside of traditional workspaces, like the gig economy. 

"Workers always used to work for an employer, and that's where the traditional UI benefits came from. And now with the gig economy and self employed workers making more of the labor force, we need to respond to that."

Martin says the department found many applications that were missing proof of income from when the applicant was employed, and many applications that came from out of state. 

Associate Professor of Economics at Montana State University Dr. Isaac Swensen says programs like this one, created quickly in the midst of a crisis, fall short of long-term policies that kick in when a crisis hits. 

One aspect of the program that stood out to him was the request that applicants self-certify their eligibility. 

"I think that these types of environments are ripe for fraud," Swensen says.

Swensen says that self-certification in the application is meant to speed up the process, but it can also mean there’s more room for error, fraud and confusion. 

The program will lapse at the end of the year, if Congress doesn't extend it.