UPDATE: Reason has prevailed and the man no longer has to pay the money back to the state!

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Being out of work is bad enough, but imagine if the state not only took away what little unemployment benefits you had coming in every week but also demanded you pay back everything you’d received for the previous 18 months? That’s what happened to a man in New Jersey who is caught in the middle of a battle of ineptitude between church and state.

From Oct. 2008 until March 2010, the man had worked in a maintenance job for a service company owned by the Catholic Diocese of Camden. When he was laid off, he applied for, and received, unemployment benefits.

That is, up until a few months ago when the state told him there was a mistake and he needed to repay all $19,295 of the benefits he’d benefited from.

According to the Newark Star-Ledger’s Bamboozled column, what appears to have happened is this: When the man started his job in 2008, the company he worked for was not a non-profit, in spite of being a part of the diocese. That means it collected unemployment and disability insurance out of his paycheck.

Then that company managed to get its status changed at some point in 2009, meaning it no longer collected insurance payments.

When the benefits dried up and the repayment demand was made, the state told him it was because he had worked for a non-profit religious organization.

He finally got a phone hearing in March for his appeal.

“I produced my pay stubs that prove unemployment compensation tax was deducted from my pay,” he tells Bamboozled. “These deductions were taken out from my first check in March 2008 until the end of September 2009 – a total of 18 months.”

Even though his employer did become a non-profit during his period of employment — a status change about which he says he was never told, and which the diocese confirms was only announced in a voluntary staff meeting — he had still made unemployment insurance payments during his base year of Oct. 2008 to Sept. 2009, meaning he should have been eligible (and certainly shouldn’t have to repay anything).

Part of the problem is with that Sept. 2009 date. See, the diocese claims it changed the status for the maintenance services company in June 2009, meaning it should have stopped collecting unemployment insurance. However, the employee has proof showing it was deducted up through Sept. 2009.

Now the state and the diocese are pointing fingers at each other.

The diocese says it never received any requests from the state for information about the former employee. A rep for the diocese says the state mistakenly associated the man with a separate non-profit nursing home run by the diocese.

“The issue of the $19,000? It’s obvious the state made a mistake,” says the rep.

The state refused to comment to Bamboozled on this specific case. Meanwhile, it is continuing to demand payment of the $19,000, telling the man that it will put a lien on his house until the debt is paid.

The man has requested an appeal before the agency’s board of review, which we imagine resembles something straight out of a Terry Gilliam movie.

Bamboozled: Missteps by state, Catholic Diocese hit laid-off maintenance worker with $19k bill [NJ.com]

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