Just as with any unfavorable determination issued by EDD, you must file a timely written appeal if you receive a Notice of Overpayment. Often these are accompanied by a Notice of Determination deeming you ineligible for benefits. In any case, you have 20 days from the mailing date of the notice(s) to submit a written appeal. Get it in on time, or face the hurdle of convincing the judge you had "good cause" for the late submission before s/he will consider the substantive issues on appeal.
Why am I receiving this notice? Why did it take so long for EDD to recognize the problem?
There are a few reasons you may receive such a notice. First, EDD may make a determination after receiving additional information from your employer or during a subsequent review of your application that you were not in fact eligible for unemployment benefits in the first place due to the nature of your separation from the employment.
The second reason may be that you neglected to report hours worked and wages earned on your claim forms, and through tax filings required to be submitted by the employer on anywhere from a quarterly to yearly basis, EDD discovers that you in fact had earned money during weeks you did not claim any earnings. Because the reports EDD receives are so far removed in time from your completion of the claim forms, it may be many months, or in some cases, a year or more before the problem is discovered. As a result, you may find yourself with a bill ranging from less than $1,000 to $20,000+.
Why does the notice claim I committed fraud? I didn't do this on purpose.
In every single overpayment case I have handled, EDD alleges fraud and/or intentional misstatements or omissions on the part of the claimant for the purpose obtaining benefits to which they were not entitled. DON'T WORRY! Unless you set out to defraud EDD and fail to cooperate them, it is extremely unlikely you will be prosecuted in any way.
Most of my clients misunderstood the claim forms, didn't realize the income they received needed to be reported as earnings, or were depending upon EDD's original finding that they were eligible for benefits.
In most cases, if you honestly believed you were doing the right thing, and can convince the judge this is the case, you will at the very least get the 30% fraud penalty set aside.
I can't afford to repay the amount they're asking. What do I do?
In most cases, the claimant was in fact overpaid some amount of money. Even if you are able to convince the judge to remove the 30% penalty, the sum can still be staggering for an unemployed person.
In some cases, you and/or your attorney may be able to convince the judge that it would cause extreme financial hardship for you to repay the amounts due. Whether the judge will excuse the debt is largely dependent on what your income and expenditures are, whether you used the overpayment for vital necessities of life, and to what degree fault may be attributed to you.
No matter how much you are struggling financially, you cannot count on the actual overpayment amount being excused due to financial hardship. If it is not, the matter will be turned back over to the EDD collections department, and you can try to establish a reasonable payment plan. In extreme cases, EDD may obtain a court judgment against you and garnish your future wages.