State Goofs, Demands Man Pay Back $17,000 In Unemployment Benefits

Back in 2007, when a newly unemployed New Jersey man decided to relocate to South Carolina, he checked with the state to let them know about the move and to make sure he was filing all his unemployment records properly. $17,000 and multiple assurances from state employees later, he was suddenly told he needed to repay all that money.

The Newark Star-Ledger’s Bamboozled column has the full, complicated story of the man who has spent the last couple of years trying to show that he wasn’t attempting to defraud the state of New Jersey; just doing exactly what they told him to do.

He lost his job in the summer of 2007 and moved with his family to South Carolina in October of that same year. All the while, he continued to seek out full-time work.

“I called and notified the state of New Jersey that we moved,” he tells Bamboozled. “I was told that my claim would continue from the originating state — New Jersey.”

That proved more difficult than expected, as the economy was falling into a massive sinkhole during this time. In 2008, he eventually landed a part-time gig at Lowe’s, making slightly above minimum wage and sometimes working as few as 10 hours in a week.

“I was told by the State of New Jersey that I could continue to collect as long as I reported how many hours I worked part time each week,” he recalls. And so he logged his hours with his former state, which continued to pay him for the hours he didn’t work.

He filed for extended benefits in July 2008. Again, the folks in New Jersey gave him the thumbs-up and provided no indication of a problem.

“At no time in any form of communication did anyone from the state of New Jersey tell me that I needed to shift my claim to the state of South Carolina,” he says. “I continued to receive packets of notices regarding my benefit determination, each time telling me I qualified to continue to receive my benefits.”

He tells Bamboozled he even called the state twice to ask that he was doing everything the correct way.

When his benefits finally dried up in April 2010, he called New Jersey’s unemployment folks to confirm. He says the woman he spoke to said he’d indeed exhausted his unemployment. This was also the first time anyone indicated to the man that there might be a problem.

“I remember she asked me if anyone told me I should have filed with South Carolina,” he says. “I said no one did. She told me not to worry, but I should have opened a claim with South Carolina months ago.”

He says she told him not to worry; someone in her office goofed and should have told him.

But soon the state was notifying him that he needed to pay back $17,000 in unemployment benefits it claims should not have been paid out by New Jersey.

Since then, he’s been banging his head against the state Dept. of Labor’s appeals process, providing them with all the documentation to show that he logged all his Lowe’s hours with the state. But he’s not had any success in getting anyone to listen.

Bamboozled spoke to a Dept. of Labor rep, who confirmed that New Jersey residents can continue to collect benefits even after they leave the state, but that “people with jobs or part-time jobs can end up earning enough income in that new state where they live that they technically should trigger off New Jersey and the federal extensions, and qualify for new claims and payments through the (unemployment insurance) system in the new state.”

That makes sense, but whose responsibility is it to know when someone on unemployment has reached that pay level where they need to switch over to the new state? It would seem that the Dept. of Labor would be more likely to have a system in place to identify such issues before it’s too late.

“I trusted the state to give me the right information when I asked the questions,” argues the man. “I’m not an expert on unemployment benefits.”

This isn’t the first time we’ve heard of New Jersey making demands for repayment after what appears to be an obvious error. A year ago, we told you about the man who was told he needed to pay back $19,000 of unemployment benefits because his former employer had switched its status to nonprofit during his tenure there, and was supposed to stop taking unemployment insurance out of his paycheck. However, he had proof that the employer did indeed continue to take that money from his pay and ultimately the state decided to not go after the $19,000.