Colorado Wants $128M Back After Unemployment Benefits Mistake

DENVER (CBS4)- Colorado wants its money back after the state paid out $128 million in unemployment benefits by mistake.

Ninety-six percent of the payouts are because of a clerical mistake; either people were overpaid or people received checks when they didn't deserve them. Four percent of the payouts were paid to scammers.

"I absolutely cannot pay it back," said unemployment benefits recipient Lyn McLaughlin.

She received $3,500 in unemployment that Colorado wants her to return.

"All for money that was mine, it wasn't a mistake. I got the money, it wasn't a mistake. I used it," said McLaughlin.

She continues to receive threatening letters from the Colorado Department of Labor and Employment.

"They are telling me that I could be garnished for future wages, there will be 18 percent interest, that I'll be put in the court system," said McLaughlin.

Representatives with the department said some of the mistaken claims were filed fraudulently but the majority are clerical errors made by the state.

"There are times when a claimant isn't eligible and whether they knew or didn't know it, that money belongs to the state. We understand hardship but we need to return that money to the state," said Cher Haavind with the Colorado Department of Labor and Employment.

The rate of unemployment is slightly higher than the national average. Colorado is the sixth worst state in the U.S. for payment errors in unemployment.

Those who have been asked to repay the benefits received can file an appeal and try to keep the money or set up a payment plan and try to pay it off slowly.

RELATED LINK: colorado.gov