NCJ Number
69822
Journal
Memphis State University Law Review Volume: 7 Dated: (Summer 1977) Pages: 683-701
Date Published
1977
Length
18 pages
Annotation
The article examines waiver procedures used when an error results in an overpayment of unemployment compensation in Tennessee and concludes that they cause hardship for the innocent claimant and violate constitutional rights.
Abstract
Unemployment compensation is regulated by the 1947 Tennessee Employment Security Law and administered by the Department of Employment Security (DES). Although DES has an interest in reclaiming overpaid benefits so that adequate resources can be maintained in the compensation fund, they provide for a waiver of recoupment if recipients can prove that the overpayment was received through no improper conduct on their part and if equity and good conscience would prevent recoupment. An overpayment can occur because of an error in the initial computation of the weekly benefit amount or errors made during the benefit year, such as duplicate checks or failure to deduct reports of wages earned. When an overpayment error is discovered, DES can decide whether to waive recoupment. If repayment is required, the recipient is notified but can appeal the decision although no benefits are received during the process. The difficulties in this procedure are demonstrated in a hypothetical case. The paper also argues that the lack of adequate procedural safeguards prior to recoupment violates a claimant's due process rights because future benefits are withheld before the opportunity for even a rudimentary hearing is provided. Furthermore, sections of the Social Security Act have been interpreted as requiring a prerecoupment hearing before benefits can be suspended. The present practices of the DES also fail to comply with the 1974 Tennessee Uniform Administrative Procedures Act which requires that all parties in a contested case be given reasonable notice and be informed about the legal authority and nature of the hearing. New procedures to protect the claimant from deprivation should be established, such as a full evidentiary hearing prior to recoupment. At a minimum, recipients should be properly notified and given the opportunity to protest before benefits are withheld. Footnotes are provided.