State Sen. Lana Theis introduced legislation Thursday that would protect Michigan residents from being forced to repay unemployment benefits for this they applied and received in good faith during the COVID-19 pandemic.
“During COVID-19, thousands of Michigan residents applied for unemployment benefits honestly and in good faith — following the guidance the state provided at the time,” said Theis, R-Brighton, said in a release. “Years later, many are being told they were ‘overpaid’ and are now facing collection actions — sometimes in the tens of thousands of dollars. These clawbacks are creating severe financial hardship for people who did nothing wrong; they relied on the state’s instructions and accepted benefits the state told them they were entitled to receive.”
Theis said she has heard from dozens of constituents who are now being asked to repay money they already spent on necessities like rent, groceries, medicine and utilities at a time when the pandemic created unprecedented financial strain.
“My bill restores fairness,” Theis said. “We can and should distinguish between bad actors and honest claimants who followed the rules as they understood them. It recognizes that agency errors, evolving federal guidance and system design contributed to overpayments. Honest claimants should not be punished for relying on the state’s own determinations.”
The legislation amends the Michigan Employment Security Act to authorize the state to waive collection efforts for claimants who applied honestly and accepted benefits in good faith. The measure would also help the agency focus resources on identifying and pursuing actual fraud, rather than devoting time and taxpayer dollars to low-yield collections that push families to the brink.
“This legislation is about common sense and compassion,” Theis said. “Families should not be forced into financial crisis because of government mistakes. Instead, we should be focusing on rooting out fraud and making sure our system works for those who need it most.”
Senate Bill 625 was formally introduced on Oct. 23 and referred to the Senate Committee on Labor.
