Ask The Lawyer, What Happens if I Forgot to File Some Income?


QUESTION:  I began receiving unemployment benefits when I was laid off work at the end of March. In late April, my boss asked if I could do a little work from home – but it’s only about 10 hours per week. I didn’t report the work when I certified online with the Unemployment Insurance Agency, because I wasn’t paid for it until late May. And then I forgot to report it last week. Should I report it now, or just let it go? I’m still doing the work, but the pay is erratic.

ANSWER: Report it immediately. In its handbook for the newly unemployed, the Unemployment Insurance Agency (UIA) recommends you send a message through your MiWAM account as soon as possible to prevent a finding of fraud. Failing to report your earnings is viewed as fraud, and the UIA takes a very dim view of those who fraudulently collect benefits to which they are not legally entitled. Under the law, MCL 421.54(b), a person who deliberately “makes a false statement or representation … or knowingly and willfully with intent to defraud fails to disclose a material fact, to obtain or increase a benefit,” could be required to repay the benefit amount received plus damages equal to that amount. For a second violation, the damages are 1.5 times the amount obtained.

You may earn some money through part-time work and still receive (reduced) unemployment benefits, but you must report the money the week in which it is earned, not the week in which it is paid. This is true even for those who are not paid until weeks, or sometimes months, after the work is completed.

The fact that you receive benefits does not necessarily mean the Agency has found you are entitled to them. If information the UIA receives after the fact indicates you are not eligible for benefits, you will be required to repay the amount received.

The law’s harshest fraud penalties are reserved for those who commit identity theft. Such impostors will be required to repay the amount received as a result of their fraud, plus damages equal to four times that amount. The unemployment agency may also refer the matter to the county prosecutor. Identity theft is a criminal offense, punishable by five years in prison and/or a fine of $25,000.

Since the coronavirus pandemic put millions of Michiganders out of work in March, the UIA has received more than 50,000 reports of unemployment fraud and identity theft. On June 5, the state issued “stop payment” notices on 340,000 accounts as it investigated suspect claims, some of which it believed were made by criminals using information gained from data breaches at businesses like Equifax. By June 13, the Agency had resumed benefit payments on some 140,000 claims, but it could take weeks, of even months, before identifies are verified on the remaining 200,000 accounts, and bonafide claimants resume receiving benefits.

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