Overpayment of Unemployment Benefits

Overpayments occur when we pay claimants unemployment benefits that they were not eligible to receive. Claimants must repay those benefits even if they were not at fault for the overpayment.

Examples of what can cause an overpayment:

  • Claimant failed to report earnings or reported an incorrect earnings amount when requesting benefit payment.
  • Claimant or employer provided false information about a job separation.
  • Claimant provided false information about the work search.
  • Claimant committed fraud by giving false information when applying for benefits or requesting payment.
  • Claimant’s eligibility for benefits was reversed due to an appeals hearing after receiving benefits.
  • The wage history we used to establish a claim included errors and correction of the wage errors resulted in a lower benefit amount than initially determined.

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Unemployment Benefits Fraud

Claimants and employers commit fraud when they knowingly provide false or misleading information, withhold information, or fail to disclose a material fact to obtain or increase benefits. Unemployment benefits fraud is punishable by law, both felony and misdemeanor, and violators could face fines and jail time.

Be aware that:

  • Failure to follow the rules can result in serious consequences.
  • Claimants and employers must respond truthfully and fully to all TWC inquiries.
  • In Texas, unemployment benefits fraud is routinely prosecuted at the felony level.

Fraud Penalties

The Texas Unemployment Compensation Act (TUCA) provides for administrative, civil action, and criminal penalties for fraudulent misrepresentation to obtain benefits as well as for recovery or recoupment of benefits that were improperly paid. It also provides penalties for fraudulent representation by an employer or any other person to prevent payment of benefits on legitimate claims or to reduce tax payments.

Penalties may include fines of up to $4,000 or imprisonment of up to one year or both, forfeiture of benefits received, and the right to benefits that remain in the claimant's benefit year. Claimants who commit unemployment fraud must pay back benefits they were not entitled to receive plus a 15 percent penalty on benefits they fraudulently received. TUCA is the legal basis for initiating a civil suit against a claimant for collection of past due benefit overpayments.

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