Unemployed Kansan owes more than $11K in benefits after getting overpayment letter

TOPEKA, Kan. (KSNT) – A Kansas man is seeking help after receiving a letter that says he owes thousands of dollars in overpaid unemployment benefits.

George Larmer, who lives in Wichita, lost his job last year, and applied for unemployment, after suffering a critical intestinal disease that left him bed-ridden and unable to work.

“They said I was eligible because I couldn’t work, because I was medically incapable of working,” Larmer said. “Well, I’ve been in and out of surgery since January 31st.”

Between May and October of 2020, Larmer received more than $11,000 in unemployment insurance payments. He then got a letter from the Kansas Department of Labor, KDOL, stating that he was determined to be ineligible and overpaid. According to the letter, Larmer now owes it all back.

“If I had the money, I’d pay them, but I don’t. That’s the situation I’m in. I owe over $100,000 in medical bills,” he said.

Larmer said he’s tried calling the department and reaching out to lawmakers for help, but hasn’t been able to speak with anyone to rectify the situation.

In an interview with Kansas’ Capitol Bureau, KDOL Deputy Secretary Brett Flaschbarth, said the department is unable to provide information on Larmer’s claim due to privacy laws.

“There are some limited exceptions. For example, criminal investigations, the information can be shared, and disclosure to public officials in the performance of their duties,” Flaschbarth said.

According to the department, federal law requires them to seek collection of any payments made in error, but “clawbacks” or retrieving money from a person’s bank account is not used to correct the issue.

Federal law requires KDOL to seek collection of any unemployment insurance payments that were made in error or due to fraud. There are a variety of collection mechanisms that are utilized, including voluntary repayment plans and use of the State of Kansas Setoff Program as well as the federal Treasury Offset Program. The practice of using a “clawback” or retrieving erroneously paid benefits from a claimant’s bank account is legally permissible but is not currently utilized by the agency in its collection efforts. The exception would be efforts to retrieve funds from banking institutions that have accounts which have been clearly identified as being paid, as the result of a fraudulent scheme.

Kansas Department of Labor

The state is working on resolving issues with people struggling to get through phone lines, as the state’s unemployment office fields a high-volume of calls. Governor Laura Kelly announced the gradual onboarding of 500 more customer service representatives on Wednesday.

Until then, Larmer said he’s still trying to figure out why the department would now mark him ineligible.

According to state law, a person cannot be disqualified from receiving unemployment benefits if they were forced to leave work due to an illness or injury as advised by a medical professional.

Larmer said ongoing medical complication have put a hold on his ability to return to the workforce, receiving notices from doctors that have advised against it.

Now, he said he’s panicked, and scrambling to figure out how to pay back the money.

“If I wasn’t eligible, then why did you sign me up for it, now I’m stuck in a Catch 22. I’ve got no money, and I don’t want to lose my house and everything I own, or end up going to jail over owing money I wasn’t due to begin with, because they just paid me.”

Larmer is hoping to seek help with opening an appeal.