Detroit City Wire

Senator Lana Theis has introduced new legislation aimed at protecting Michigan residents from being required to repay unemployment benefits they received during the COVID-19 pandemic. The bill responds to concerns that many individuals who applied for and received benefits in good faith are now facing demands to return funds, sometimes amounting to tens of thousands of dollars.

“During COVID-19, thousands of Michigan residents applied for unemployment benefits honestly and in good faith — following the guidance the state provided at the time,” said Theis, R-Brighton. “Years later, many are being told they were ‘overpaid’ and are now facing collection actions — sometimes in the tens of thousands of dollars. These clawbacks are creating severe financial hardship for people who did nothing wrong; they relied on the state’s instructions and accepted benefits the state told them they were entitled to receive.”

Theis noted that she has heard from numerous constituents who have already spent their benefit money on essential needs such as rent, groceries, medicine, and utilities during a period marked by significant economic challenges.

“My bill restores fairness,” Theis said. “We can and should distinguish between bad actors and honest claimants who followed the rules as they understood them. It recognizes that agency errors, evolving federal guidance and system design contributed to overpayments. Honest claimants should not be punished for relying on the state’s own determinations.”

The proposed legislation would amend the Michigan Employment Security Act so that the state could waive efforts to collect repayments from those who applied honestly and accepted benefits in good faith. According to Theis, this change would allow state agencies to focus more resources on identifying fraudulent claims rather than pursuing collections from families experiencing financial difficulty.

“This legislation is about common sense and compassion,” Theis said. “Families should not be forced into financial crisis because of government mistakes. Instead, we should be focusing on rooting out fraud and making sure our system works for those who need it most.”

Senate Bill 625 was introduced on October 23 and sent to the Senate Committee on Labor for consideration.