FAQ: Overpayments and refunds
If you receive any Unemployment Insurance benefits to which you are not entitled, you will be required to return those benefits. Here are answers to common questions about the process.
Under the CARES Act, New Jersey must require individuals who received unemployment compensation (UC) to repay the amount to which they were not entitled (I.e., overpayment amount). However, NJ may waive these amounts under specific conditions.
Eligibility criteria for waiving CARES Act-related overpayment:
1) Overpayment was due to no fault of your own
- You did not falsify or withhold information that led to overpayment
- Each waiver request will be evaluated on a case-by-case basis
2) Repayment would be contrary to equity and good conscience
- Repayment would create financial hardship
- Recovery would be unconscionable
You can request a CARES Act-related overpayment waiver when you log in to check your claim status.
The BPC-404 monthly mailer lists the formal dollar amount required to pay on a monthly basis and also allows for the submission of a formal monthly agreement with your restitution payment. You can also pay your monthly installment using our online system.
In the past you may have received Unemployment Insurance benefits to which you were not entitled. We will recover the overpaid benefits using your current benefits.
No. In accordance with the New Jersey Unemployment Compensation law, any available benefits you are currently entitled to must be used to recoup (offset) any outstanding UI/DI debt principal that you may owe. A monthly agreement will not prevent this from occurring. Once the principal benefits have been recouped, any remaining balances of fines and interest will be your responsibility to repay. Unemployment Insurance benefits cannot be used to recoup any fines and interest you may owe.
If you (or your spouse) have an outstanding liability with this agency, your New Jersey state income tax refund and/or rebates will be withheld and applied to this debt. These collection actions can be avoided by entering into a formal installment agreement with us and maintaining the required monthly installment payments.
When your Unemployment Insurance benefits payment was issued, if you had any deductions, (i.e. child support or federal income tax withheld), if you return that payment, you are only returning the net amount. An overpayment was created because we already sent the deductions out in your name. You are responsible to repay any deductions withheld to make up the gross weekly benefit rate you were actually paid.
“Refund has been satisfied” on your letter means your debt with the Division has been paid in full. Your personal check has been voided, sent back to you, and you can reenter the amount back into your personal checking account. If you paid with a money order, the Division will not void it. You can take it, along with the purchase transaction receipt, to where you bought it and they should be able to refund your money.
When you receive the Warrant for Satisfaction that was filed for you in Superior Court, it is your responsibility to get your credit report updated. You should send copies of the Warrant for Satisfaction to all of the credit reporting agencies and request they update your credit report. We recommend you retain your Warrant for Satisfaction until you are confident that all your credit history reports were updated.
We must manually update our computer system when a debt is covered under bankruptcy.
In order to receive your benefits you must contact the Bankruptcy Unit as soon as you file your new Unemployment Insurance claim.
Contact them in writing at the address below. Include your phone number in your letter.
Bureau of Benefit Payment Control
Attn: Bankruptcy Dept.
Refund Processing Section
PO Box 951
Trenton, NJ 08625-0951
A discharged bankruptcy does not satisfy or lift the judgment that is on your credit report. One year after the bankruptcy is discharged you must file with Superior Court to have the judgment canceled. For further information, or to file the required documents, you should contact your bankruptcy attorney. We do not handle this process.
The Treasury Offset Program (TOP) is used to collect delinquent debts owed to Federal agencies and states in accordance with Federal law. Federal payments, such as Federal Tax Refunds, are used in whole or in part to offset delinquent debts that qualify for collection by offset. If a claimant’s IRS refund was offset, the funds were used to pay the delinquent, outstanding debt that was incurred from the improper collection of Unemployment benefits. Collection of debt in this manner is only done after all other attempts have failed.
If you have an outstanding overpayment balance, it may be subject to submission to the Treasury Offset Program (TOP) of the Internal Revenue Service (IRS). Only delinquent debts are submitted to the IRS for collection of available tax refunds. Monthly statements are sent by the New Jersey Department of Labor and Workforce Development (NJLWD) advising of the debt owed and warning that NJLWD will submit your debt to the IRS for offset of your future Federal Income Tax refund(s). Additional interest, penalties, and other charges may be assessed on the balance you currently owe.
The TOP offset process is defined under 26 USC 6402(f) and Title 31CFR 285.8. The IRS is not required to send you further notice of the TOP offset program when reducing your refund to pay off your debt balance.
If you have further questions about why there was an offset against your federal income tax refund, write to:
New Jersey Department of Labor and Workforce Development
Refund Processing Section
PO Box 951
Trenton, NJ 08625-0951
Please include your claimant ID number and a daytime telephone number where you may be reached with any correspondence you submit. Your inquiry with the Refund Processing Unit of the Bureau of Benefit Payment regarding this overpayment is limited to establishing a formal agreement to repay the debt. You will not be able to appeal or request additional investigation into the debt unless you can provide documented proof of 1) identity theft, OR, 2) that you have already repaid this debt in full.
You also may contact us about TOP at 609-659-4050.