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Eligibility debate

Cooper first knew something was amiss when he received a letter from the Tennessee Department of Labor in July 2021 stating he hadn’t provided the proper information to prove his eligibility for unemployment benefits.

He was asked to submit photos of his driver’s license, a photo of him holding his driver’s license, a photo of his social security card, proof of address and tax documents — but after doing so the state continued to deny his eligibility.

“Why am I disqualified when I was approved — when all the documents, everything they need was sent? I did exactly what they wanted me to do,” Cooper said.

He fought the state’s decision through a tribunal appeal authority, which reached the conclusion that: “There is no evidence the claimant knowingly made false statements to obtain benefits.”

However, the case went back to the Department of Labor, which once again demanded Cooper return the overpayment — stating he waited too long to appeal their first argument nearly two years ago. They sent an official notice to Cooper in March demanding he repay 10% of the $24,000 immediately.

But Cooper — who is soon due to start receiving disability Social Security benefits of about $1,000 per month — claims he can’t afford to and is not willing to make any payments. It’s unclear whether the state will chase its debt by garnishing Cooper’s disability benefits — something that is allowed when a debt is owed to the government.

“I wasn’t fraudulent doing one thing,” Cooper said. “Everything I was supposed to do, I have done. Everything I received I was eligible for. And I have no intention of paying anything back.”

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Benefit overpayments

Cooper’s experience adds to a growing discourse in the U.S. around overpaid benefits — as well as shocking demands for Americans to pay back money that governments claim they never should have received.

The U.S. Government Accountability Office says states reported around $55.8 billion in overpayments of unemployment insurance benefits during the pandemic — $5.3 billion of which were fraudulent. About $6.8 billion has been recovered, including $1.2 billion in fraudulent payments.

Collecting overpayments can be a big problem for financially insecure people — such as retirees and disabled workers, their dependents and survivors of deceased workers — including those who receive Social Security benefits.

Americans such as Cooper can end up relying on these benefits, but the Social Security Administration (SSA) faces problems of its own. The agency has recently come under fire from lawmakers after news reports it has been aggressively trying to claw back money from those it says were overpaid.

In the fiscal year 2023 (Oct. 1, 2022 to Sept. 30, 2023), the SSA reported over $4.9 billion in recovered overpayments, but says it ended the year with $23 billion of overpayments still uncollected.

The SSA has announced steps it is taking to make overpayment issues easier for beneficiaries — including extending repayment plans, removing the burden of proof of fault and making it easier for people to request a waiver — but many Americans will still have to dig deep to pay back what they owe.

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Bethan Moorcraft is a reporter for Moneywise with experience in news editing and business reporting across international markets.

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