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Audits, Overpayments and Fraud Frequently Asked Questions - Unemployment Insurance

  1. Are unemployment insurance (UI) claims audited?
  2. What is an overpayment?
  3. How do I repay the overpayment?
  4. Can I appeal or waive an overpayment?
  5. What if I am overpaid UI benefits in another state and filed a Maryland UI claim?
  6. What is UI fraud? What is a fraud overpayment?
  7. How do I report UI fraud?
  8. I received a 1099-G tax form, but I did not apply for UI benefits last year. What should I do?

The Benefit Payment Control (BPC) unit promotes and maintains the integrity of the unemployment insurance (UI) program through detection, investigation, establishment, and recovery of UI overpayments made to claimants.

Audits

1. Are unemployment insurance (UI) claims audited?

The Maryland Division of Unemployment Insurance (Division) conducts random audits to verify that claimants are eligible for UI benefits. A claimant refers to an individual who submits a claim for UI benefits.

These audits include the National Directory of New Hires program program, the National Directory of New Hires, the Wage Crossmatch audit, and audits instigated due to reports of fraud.

The Wage Crossmatch is a quarterly audit that matches earnings reported by Maryland employers with claimants (individuals who have filed for and received unemployment insurance benefits).

  • If the audit reveals that a claimant did not report or underreported wages while collecting UI benefits, the Division may determine that some or all of the claimant’s UI benefits were overpaid. Additionally, it may be determined that UI fraud was committed (see below for more about overpayments and/or UI fraud).

NOTE: The Division may contact an employer for additional information during an audit.

Overpayments

2. What is an overpayment?

For UI purposes, an overpayment occurs when a claimant (an individual who files an initial claim for unemployment insurance (UI) benefits) receives a benefit payment to which the claimant is not entitled. If you are overpaid, you will receive an overpayment determination via your preferred communication method (which you selected when you filed an initial claim) and your BEACON portal (for more, see the BEACON System Overview webpage).

The determination will include the reason that you are overpaid, the overpayment amount, appeal information, and etc.

Overpayments can occur due to a penalty resulting from: employment separation; changes in your availability for work; audit results; unreported/underreported wages; and appeal decisions reversing eligibility, among other reasons.

Unless your overpayment is waived or overturned on appeal, you will be required to repay the overpaid benefits and any additional fines, penalties, and interest. Otherwise, legal action will be taken to collect the debt.

NOTE: You do not need to repay these amounts while any timely appeal or waiver request is pending (see questions #4 for details).

3. How do I repay the overpayment?

You can repay your overpayment by logging in to BEACON; navigating to the Action Items section of the portal home screen; selecting the “Pay Now” link under the overpayment balance; and following the prompts.

overpayment screen in BEACON

NOTE: If you are unable to repay the overpayment at one time, you can establish a repayment agreement to pay in monthly installments.

  • To establish a repayment agreement, log in to BEACON and select Benefit Payment from the left menu. If you are eligible for a repayment plan, there will be a link titled “Payment Plan.” Each month, you will receive a statement reflecting your monthly payments (received prior to the 25th of the month) and your remaining balance.

4. Can I appeal or waive an overpayment?

You may appeal an overpayment determination to the Lower Appeals Division in BEACON or in writing. Appeal instructions will be included in the determination.

If you disagree with the Lower Appeals decision, you can appeal to the Board of Appeals. For more, see the Appeals webpage.

To file in BEACON:

  • Log in to BEACON. Select "Correspondence" from the left menu, and then select the “Search” button.
  • If there is a determination which is appealable, there will be a “File Appeal” hyperlink on the end of the row of that determination.
  • Select the "File Appeal" hyperlink and fill out the form to file an appeal. At the end of that process, you will be issued an appeal number.

To file in writing, please include:

  • your name as it appears on the determination,
  • Claimant ID number,
  • telephone number
  • date of the determination, and
  • a statement about why you disagree with the determination.

Send your appeal via:

  • Mail: Maryland Department of Labor
    Lower Appeals Division
    2800 W. Patapsco Avenue
    Baltimore, MD 21230
  • Fax: (410) 225-9781
  • Email: UILowerAppeals.Labor@maryland.gov

Overpayment Waiver

To apply to waive an overpayment: Complete and submit a waiver application to the Division. See the Overpayment Waiver Criteria webpage for waiver criteria and a waiver application.

5. What happens if I am overpaid UI benefits in another state and filed a Maryland UI claim?

Maryland is part of the Interstate Reciprocal Overpayment Recovery Arrangement (IRORA), which allows participating states to recover overpayments for each other.

Example: If you have an overpayment balance in another state and you file for UI benefits in Maryland, your Maryland UI benefit payments will be used to pay off the overpayment balance in the other state.

You must address any questions, appeals, or other repayment arrangements regarding that state's debt with the other state.

UI Fraud

6. What is UI fraud? What is fraud overpayment?

If you knowingly make false statements, misrepresent or fail to give important facts to obtain or increase UI benefits, you may be determined to have committed UI fraud.

Some examples of UI fraud include:

  • filing for benefits while working and not reporting your earnings; and,
  • not reporting payments (wages, severance, pension/annuity, vacation/holiday pay etc.) when filing your initial claim or weekly claim certification.

For more, see Unemployment Insurance in Maryland; A Guide to Reemployment.

NOTE: If you make an honest mistake on your initial claim or weekly claim certification, notify a claims agent at 667-207-6520 as soon as you discover the mistake to avoid penalties.

Fraud Overpayment

A fraud overpayment is the amount of UI benefits paid for any week(s) in which it is determined that you committed UI fraud. If it is determined that you committed UI fraud, you may be:

  • considered overpaid for all benefits acquired fraudulently;
  • required to repay the fraudulently acquired benefits, with a 15% penalty and a 1.5% monthly interest payment;
  • disqualified from receiving UI benefits for one calendar year; and,
  • subject to imprisonment, a fine of up to $1,000, or both.

NOTE: If it is determined that you committed UI fraud because you worked part-time and had unreported earnings (that were less than your weekly benefit amount), you must repay your entire weekly benefit amount for the affected week(s). If your overpayment is not due to fraud, you may be required to repay a portion of your weekly benefit amount.

7. How do I report UI fraud?

To report UI fraud to the Division, either:

For more information about UI fraud, see:

8. I received a 1099-G tax form, but I did not apply for UI benefits last year. What should I do?

Tax form 1099-G is issued to any individual who received UI benefits for the prior calendar year. If you received a 1099-G but did not collect UI benefits last year, complete this affidavit form and email it, along with a copy of your picture ID, to dlui1099-labor@maryland.gov.

Please retain a copy of the affidavit form. For questions about an incorrect 1099-G, contact dlui1099-labor@maryland.gov or 410-767-2404.


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