Mass. bill would limit recovery of non-fault unemployment overpayments and expand waiver protections

BOSTON — A bill filed Jan. 6, 2025, by Sen. Lydia Edwards (Third Suffolk) would amend Section 69 and related provisions of Chapter 151A of the Massachusetts General Laws to restrict recovery of non-fault unemployment insurance overpayments and to expand when the Department of Unemployment Assistance may waive recovery.

The proposal would: cap deductions from future benefits for non-fault overpayments at 10% of an individual’s weekly benefit rate; require the department to cancel remaining restitution three years after an erroneous payment if the claimant is judged without fault; pause most recovery efforts for 60 days after notice if a claimant has not been found at fault; and expand specific circumstances under which waivers must be granted or considered. The filing is a bill proposal; it has not become law.

The bill’s core change is to Section 69 of Chapter 151A, which governs recovery of overpaid unemployment benefits. It would allow deductions from future benefit payments only up to 10% of the claimant’s weekly benefit rate when the department has determined the claimant was without fault. For civil actions to recover overpayments, the bill keeps a six-year statute of limitations generally but provides a three-year limit where the department has not found the individual at fault.

The measure also adds a mandatory administrative waiver regime for many non-fault overpayments. It lists several situations in which the department must consider or grant a waiver, including when the claimant: is receiving or eligible for specified public benefits or has after-tax income at 200% or less of the annual poverty threshold established by the Community Services Administration; was paid benefits while the department detected a nonmonetary eligibility issue but did not issue a determination within 21 days of detection; experienced a reversal of an award after an appeal filed more than 30 days after the initial award; was affected by the department’s suspension of "lack of work" notices between March 20, 2020, and June 22, 2020; failed to submit documentation for Pandemic Unemployment Assistance (PUA) that the department later required; or was eligible for a program week but was incorrectly paid at a higher weekly rate under PUA or Pandemic Extended Unemployment Compensation (PEUC).

The bill would also require the department to: - Provide multilingual, in-person and telephone assistance where it offers in-person services, to help claimants complete waiver requests; - Notify claimants in simple, plain language and in the claimant’s primary language of their right to apply for a waiver at several points (when an overpayment is established, when a related determination becomes final, when a new claim is filed that might be used to recoup an overpayment, and when the department initiates collections communications); and - Promptly refund recovered amounts if the department later waives recovery, to the extent permitted by the U.S. Treasury’s treasury offset program.

On timing and collections, the bill bars the department from undertaking recovery efforts, deducting benefits from new claims, or setting off refunds against overpayments until 60 days after the claimant is notified of the waiver-application right — or while a waiver request is pending, or until a denial becomes final. That 60-day pause applies only to overpayments for which the claimant has not been determined to be at fault.

The proposal further amends Section 69B to limit the department’s ability to set off state tax refunds or federal tax refunds against an overpayment: a setoff could occur against a state refund only if the department has a final fault determination and not otherwise; a federal refund offset through the U.S. Department of the Treasury would be allowed only where the department has a final fault determination or if the treasury offset program otherwise requires it.

Why it matters: The bill would change how and when the state recoups overpaid unemployment benefits, adding protections for claimants the department judges to be without fault and for low-income individuals. The changes touch routine administrative practices — timing of determinations and notices, multilingual assistance, and offsets — and could affect the timing and amount of recoveries for thousands of claimants if enacted.

Context and status: The filing text notes similar matter filed in the previous legislative session (Senate No. 1162 of 2023–2024). This entry is a bill filing for consideration in the One Hundred and Ninety-Fourth General Court (2025–2026). The bill must pass the legislature and be signed by the governor to take effect. The proposal assigns several implementation and procedural changes to the Department of Unemployment Assistance and references standards and definitions found in sections 62A, 69D, and Sections 39–42 of Chapter 151A, as well as 430 CMR 6.12 and the federal treasury offset program.

No vote or formal legislative action on the bill is recorded in the filing document.