LANSING, Mich. — It's been a mess. The pandemic forced thousands of Michiganders out of their jobs, and to keep food on the table, most turned to unemployment to supplement their income while they waited on furlough or found other work.
But the system they needed help from wasn't equipped to handle the sudden and massive amount of requests.
"Anything you do fast you’re going to do imperfectly," said State Representative David LaGrand.
LaGrand represents Grand Rapids and Michigan's 75th District. He says it's not just his office that's been overwhelmed with calls for nearly two years, but every member of the legislature.
"The good news was, the federal government really tried to step in and help supplement people’s income so that our economy didn’t fall apart," he said.
How we got to where we are
In past interviews, LaGrand has talked about the MIDAS system, which in his words was built to deny unemployment claims. He has also said because so many people needed assistance at once in an effort to keep food on their tables, the intensive screening of that system was, in essence, tossed away, and claims were passed with far less scrutiny.
"You add all that together and you end up with about five different ways things can fall apart," LaGrand said. "We have people who legitimately were given money and went out and spent it on things like groceries and transportation and keeping their lives together."
The use of the word "legitimately" is important. Most of the money given to Michiganders was federal Pandemic Unemployment Assistance (PUA). The state's Unemployment Insurance Agency was responsible for distributing that money throughout the pandemic, and did so through a number of eligibility criteria.
A report by Michigan's Auditor General released near the end of November 2021 showed the UIA had overpaid nearly $4 billion in improper unemployment benefits. While most of that was federal money, it was still given out in error.
Because of that, people started to get letters from the UIA demanding all of the benefits they were given be repaid.
RELATED: 'He's not going to have a Christmas this year:' Single mom struggles with unemployment system issues
Another critical discovery in that Auditor General report was that in October 2020, the U.S. Department of Labor reached out to Michigan's UIA saying they needed to correct four improper PUA eligibility criteria. The UIA did not review or remove any of the improper checkboxes, leading to those improper payments.
How legislators are working to fix the problem
In response, the Joint Oversight Committee held its first hearing to determine how this happened. It would not be the last.
13 ON YOUR SIDE has reached out to UIA Director Julia Dale for comment multiple times since that November report, and has yet to be given permission for an interview.
A month later, even more light was shed on how devastating the errors in unemployment distribution were through the pandemic. A nationwide audit of all 50 state unemployment agencies found that Michigan's UIA overpaid not $4 billion, but between $8.3 and $8.5 billion in improper, misrepresented or fraudulent claims.
In response to that new information, Gov. Gretchen Whitmer issued an executive order creating a Fraud Response Team to crack down on intentional bad actors defrauding the system. At that point, 50 people had been charged with unemployment fraud, and five were UIA employees or contract workers.
RELATED: Audit finds UIA overpaid $8.3B in fraudulent claims, Michiganders still being told they owe money
While all of this is being discovered, thousands of Michiganders were still receiving letters stating they had to repay all of their benefits. 13 ON YOUR SIDE covered multiple stories of the stress-inducing letters, including:
To add fuel to the fire, the overwhelmed UIA was dealing with a backlog in claims for people who needed help, meaning those who had lost their jobs later in the pandemic were unable to receive benefits. Long wait times, frustrating calls and billions of wrongly paid money awaited Director Julia Dale, who had only stepped in as director on Oct. 25.
RELATED: 'It's just been a real headache': Seasonal workers frustrated over unemployment benefits delay
"If the UIA gives out money that it shouldn’t have given out, that’s not the fault of the people who got the money," LaGrand said.
He and the rest of the House Legislature recently passed a packet of bills addressing the UIA situation.
LaGrand says accountability is one of the biggest things that needs to change. One of the bills passed would create a citizen advocate for the UIA, specifically tasked with keeping an eye on activity within and concerning the agency, fielding calls and complaints and reporting issues to lawmakers before it becomes too late.
Another bill would force the UIA to review claims for benefit eligibility within 15 days of them being submitted. Those bills have all been passed by the House, and are set to be reviewed by the Senate.
At the end of January, Dale and the UIA finally reached out for help. They've asked the federal government for assistance in waiving the overpayments and screening waivers for those cases. Though tax forms regarding unemployment are delayed, the federal assistance could mean relief for an overtaxed system in dire straights.
Here's where to find help filing taxes with unemployment
For information on filing your taxes with unemployment, this story will help with questions about 1099-G forms, and this one will show you a credit you may be eligible for.
With a complex and often frustrating two years behind them, the UIA is facing a massive challenge. A relatively new director steering a ship that was navigating with a 10-year-old system through an unprecedented pandemic has reached out for help. Lawmakers have finally made moves to fix the issues and prevent them from moving forward.
“We’ve built a system that is careful, and that’s not a perfect system to respond to crises,” said LaGrand.
It may not be the brightest, but he's confident there's a light at the end of the tunnel.
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