https://kycir.org/2020/08/06/in-kentucky-unemployment-checks-are-docked-for-old-state-debts/
Overpayment debt can pop up years after a person first collected unemployment, says James Maxson, an unemployment insurance lawyer who served as in-house counsel of Kentucky’s Office of Unemployment Insurance from 2008 until 2016.
“If you’ve received benefits and it was later determined that you were ineligible, not only do you stop receiving benefits prospectively, not only do they turn off the tap, but you actually have to pay those benefits back,” Maxson said.
State agencies are required by federal regulations to pursue any overpayment in unemployment benefits, but some states have passed laws allowing them to waive debt that is the result of an agency error, or that causes financial hardship. Kentucky is one of just 10 states that does not allow a waiver of overpayment debt in any circumstances, according to the federal Department of Labor.
“It’s an aspect of Kentucky’s system that I disagree with very much,” Maxson said. “But I’m sure that (overpayments) are beginning to happen and I’m talking to people pretty regularly who say, ‘They told me I’m not eligible and they want me to repay that amount.’”