Louisville, Kentucky, January 16, 2026
The Kentucky Office of Unemployment Insurance has mandated that thousands of individuals repay over $31 million in pandemic-related unemployment benefits due to overpayments from administrative errors and potential fraud. The affected claimants are required to review their benefit statements and follow repayment procedures, including payment plans if needed. This situation emphasizes the importance of accurate eligibility assessment for unemployment benefits, as failure to repay could lead to serious financial and legal repercussions.
Louisville, Kentucky: State Demands Repayment of Over $31 Million in Unemployment Benefits
Louisville, Kentucky – The Kentucky Office of Unemployment Insurance has instructed thousands of individuals to repay more than $31 million in unemployment benefits received during the pandemic. This action affects claimants who were overpaid due to various reasons, including administrative errors and potential fraud.
Details of the Overpayment Recovery
The overpayments occurred when individuals received benefits for which they were not eligible. The Kentucky Office of Unemployment Insurance has mandated that these funds be repaid. Claimants can make payments through major credit cards or ACH transfers via the Kentucky Career Center’s website. For those unable to pay the full amount upfront, payment arrangements can be made by contacting the Benefits Payment Control Office at (502) 564-2387 or UIoverpayments@ky.gov. Additionally, overpayments resulting from office errors will be recovered only by deducting 25% of the weekly benefit rate from future benefits, if additional benefits are claimed. Overpayments due to fraud or misrepresentation will receive a 15% penalty in addition to the amount of overpaid benefits. Interest at the rate of 1.5% per month will be added to the unpaid balance of a fraud overpayment, beginning one calendar year from the date of the determination.
Background on Unemployment Benefit Overpayments
Unemployment benefit overpayments occur when individuals receive payments during periods they are not eligible. These overpayments must be repaid to the Office of Unemployment Insurance. Non-fraud overpayments may be deducted (at a rate of 25% of the weekly benefit rate) from future benefits, or individuals may arrange to repay the amount in full or through a payment plan. Per KRS 341.415, income tax refunds may be intercepted to satisfy the repayment obligation. Overpayments resulting from office errors are recovered only by deducting 25% of the weekly benefit rate from future benefits, if additional benefits are claimed. Overpayments due to fraud or misrepresentation receive a 15% penalty in addition to the amount of overpaid benefits. Interest at the rate of 1.5% per month is added to the unpaid balance of a fraud overpayment, beginning one year from the date of the determination.
Implications for Kentucky Workers
This repayment requirement has significant implications for Kentucky workers who received unemployment benefits during the pandemic. Individuals affected by these overpayments are advised to review their benefit statements and contact the Kentucky Office of Unemployment Insurance to understand their repayment options and obligations. Failure to repay overpaid benefits can result in collection actions, including interception of state and federal income tax refunds, garnishment of wages, and potential legal action.
Conclusion
The Kentucky Office of Unemployment Insurance’s directive to repay over $31 million in unemployment benefits underscores the importance of accurate benefit distribution and the need for claimants to ensure they are eligible for the benefits they receive. Affected individuals should take prompt action to address these overpayments to avoid further financial and legal complications.
Frequently Asked Questions (FAQ)
What is an unemployment benefit overpayment?
An unemployment benefit overpayment occurs when an individual receives unemployment benefits during a period they are not eligible. These benefits must be repaid to the Office of Unemployment Insurance.
How can I repay an unemployment benefit overpayment?
Individuals can repay overpaid benefits through major credit cards or ACH transfers via the Kentucky Career Center’s website. For those unable to pay the full amount upfront, payment arrangements can be made by contacting the Benefits Payment Control Office at (502) 564-2387 or UIoverpayments@ky.gov.
What happens if I don’t repay the overpaid benefits?
Failure to repay overpaid benefits can result in collection actions, including interception of state and federal income tax refunds, garnishment of wages, and potential legal action.
Are there penalties for overpayments due to fraud?
Yes, overpayments due to fraud or misrepresentation receive a 15% penalty in addition to the amount of overpaid benefits. Interest at the rate of 1.5% per month is added to the unpaid balance of a fraud overpayment, beginning one calendar year from the date of the determination.
How can I avoid unemployment benefit overpayments?
To avoid overpayments, accurately report your employment status and earnings when claiming benefits. Ensure you meet all eligibility requirements and promptly inform the Kentucky Office of Unemployment Insurance of any changes in your circumstances.
Key Features of Unemployment Benefit Overpayments in Kentucky
| Feature | Description |
|---|---|
| Overpayment Amount | Over $31 million in unemployment benefits received during the pandemic. |
| Repayment Methods | Major credit cards or ACH transfers via the Kentucky Career Center’s website. Payment arrangements can be made by contacting the Benefits Payment Control Office at (502) 564-2387 or UIoverpayments@ky.gov. |
| Penalties for Fraud | 15% penalty in addition to the overpaid amount; interest at 1.5% per month added to the unpaid balance, starting one year from the determination date. |
| Consequences of Non-Repayment | Collection actions, including interception of state and federal income tax refunds, garnishment of wages, and potential legal action. |
| Prevention of Overpayments | Accurately report employment status and earnings; inform the Kentucky Office of Unemployment Insurance of any changes in circumstances. |
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