Thousands of jobless in N.C. told they owe money to the state

Staff WriterSeptember 28, 2010 

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Thousands of long-term unemployed North Carolinians could soon owe the state money.

JIM BOUNDS — N&O file photo

  • Those who receive letters from the state's Employment Security Commission saying they got benefits for the wrong amount should contact the commission. People may receive up to six letters over the next several days. To contact the ESC, call866-795-8877 or send an e-mail to esc.ui.customerservice@ncesc.gov.

Thousands of long-term unemployed North Carolinians could soon owe the state money because the Employment Security Commission improperly made about $28 million in payments over the last two years.

Last week, the ESC began sending out letters to about 38,000 people who it has determined were either overpaid or underpaid through no fault of their own.

Recipients, all of whom received unemployment benefits for a year or longer, are getting anywhere from one to six letters depending on the number of times their benefits have been extended.

The final letter has the correct amount due, but the letters often aren't arriving in the right order. The letters also tell people they can apply for a waiver to have the overpayment forgiven. But the ESC can provide no details on how each wavier will be evaluated.

Despite sending out the letters, the ESC was unable on Monday to provide an estimate of how many people will owe the state money.

"We are hoping a majority of these [final letters] will say zero," said Larry Parker, an ESC spokesman.

The ESC estimates about 15 percent of recipients were underpaid and will be eligible for additional benefits.

People who do owe money have until Oct. 8 to file the waiver.

"If their waiver's not approved they would have to owe money back," Parker said. "But we don't know how many that's going to be."

How did it happen?

Parker said the improper payments are the result of the ESC paying people from the wrong funding sources and thus overdrawing some accounts and aren't the result of incorrectly calculating individuals' benefits. But he was unable to explain how the accounting problems might result in some people owing the state money.

"It's really very hard to explain," he said. "It gets really tricky just because of how the program evolved since July of 2008."

Since July 2008, the federal government has approved a series of unemployment benefit extensions and North Carolina has qualified for an additional extension because of its high unemployment rate.

The ESC has been criticized at times during the economic downturn for being slow to verify unemployment claims and frustrating job seekers with delays. The ESC paid out about $42 million in unemployment benefits last week alone.

Parker said all of the 38,000 people who received letters still have active unemployment claims.

A bemused recipient

But Nikki Winterholler, 35, of Raleigh, who stopped collecting benefits Aug. 1, said she has received two letters since Saturday. The first said she was overpaid $390 for the period April 24 to May 29.

The second, which arrived Monday, said she owed $569 for the period from March 6 to April 17.

Winterholler said she has tried in vain to make sense of the numbers and plans to apply for a waiver. Having just found a job after being unemployed for 18 months, she said this was the last thing she needs.

"Now I've got these people, who are supposed to help us, wanting more money back," Winterholler said. "It's like, 'What on earth?'"

In addition to the letters, the ESC posted a message on its website that said "the improper payments are being corrected with little impact on individuals in most cases."

Those with questions were told to contact the commission by e-mail.

Winterholler said the ESC's handling of the issue made her wonder whether it's being swamped by all the unemployed people in the state.

"It think they are so overwhelmed over there that they don't know what's going on," she said.

david.bracken@newsobserver.com or 919-829-4548

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