Unemployment benefits overpayment legislation passes House committee

Closeup of the top of a tax Form 1099G Certain Government Payments - Taxable Unemployment Compensation Payments on top of cash with some coins scattered on top.

Legislation seeking to fix the issue of many Kentuckians being asked to pay back benefits they received by giving the Kentucky Labor Cabinet the ability to waive over-payment of unemployment payments passed in the House Economic Development and Workforce Investment Committee Thursday.

Senate Bill 7, sponsored by Senate President Pro Tem David Givens, waives the clawback of unemployment insurance benefits paid in error during the COVID-19 pandemic and ensures fraud protections, privacy of user information, and improvements for how employers use the unemployment insurance system.

The bill is in response to claims by Senate Republicans and the Kentucky Center for Investigative Reporting in October that the Administration of Gov. Andy Beshear made an error in the overpayment of benefits early on in the pandemic and proceeded to deem those individuals retroactively ineligible to receive said payments.

“The [unemployment insurance] system is broken and we are broke,” Kentucky Chamber Vice President of Public Affairs Kate Shanks told lawmakers in testifying in favor of the legislation.

Shanks noted Kentucky’s Unemployment Insurance Trust Fund, which currently faces a $1 billion debt to the federal government, will have to be paid back solely by employers, making unemployment insurance fix legislation a top priority of the business community in the 2021 session.

Senate Bill 7 now moves to the House for a vote on the floor.

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Jacqueline Pitts
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