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HB 5006

Relating to state financial administration; and declaring an emergency.

2025 Regular Session

HB 5006 tightens recovery of unemployment overpayments: caps wage deductions at 50%, expands hardship/agency-error waivers, and sets 3-year action time limits.

Chapter 628, (2025 Laws): Effective date August 7, 2025.
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Bill Summary · HB 5006

Summary — HB 5006 (2025)

Title: Employment security: hearings; appeal process for recipient of improperly paid unemployment benefits; provide for. (Amends MCL 421.62)

Status: House introduced 03/13/2025; read first time and referred to Committee on Economic Competitiveness 09/18/2025. Amends section 62 of the Michigan Employment Security Act (MCL 421.62), as amended by 2024 PA 238.

Purpose

HB 5006 revises rules for recovery of improperly paid unemployment benefits, clarifies time limits for agency action, expands grounds for waiver of restitution and interest (except for intentional fraud), and specifies collection methods and limits.

Key provisions

  • Recovery methods: The unemployment insurance agency may recover overpayments by:
    • Deduction from future benefits or wages (limited to 50% of each payment to the claimant),
    • Cash repayment by the individual,
    • Deduction from a state tax refund under MCL 205.30a.
  • Time limits for agency action:
    • The agency must issue a restitution determination within 3 years after the date of finality of the determination, redetermination, or appellate decision that reverses a finding of entitlement.
    • Except for cases involving suspected identity fraud, the agency may not initiate administrative or court recovery actions more than 3 years after the date the last determination establishing restitution is final.
    • The agency must issue a restitution determination within 3 years after the claimant first received benefits in the benefit year in which the issue arose. For issues involving alleged intentional false statement/misrepresentation/concealment, alternate timing applies (3 years after receipt of improperly paid benefits unless civil action filed within that period, or unless a restitution determination was already issued).
    • Time limits do not prevent the agency from using collection methods to recover amounts found to be improperly paid.
  • Waiver authority (except for intentional fraud): The agency shall waive recovery of improperly paid benefits and any interest if repayment would be “contrary to equity and good conscience.” Specified waiver grounds include:
    1. Claimant provided incorrect wage information without intent and employer failed or provided inaccurate wage data — waiver effective 30 days after the incorrect wage was first reported to the agency.
    2. Hardship: claimant’s average net household income and household cash assets (excluding social welfare and UI benefits) during the 6 months before the waiver application were at or below 150% of the most recent HHS poverty guidelines; claimant may file hardship requests subject to limits (agency shall not consider more than 3 additional hardship waiver applications in a calendar year after an initial application; cannot file a new application until the prior waiver decision is final). Waiver applies from the date the application is filed; if granted, agency must promptly refund any restitution/interest paid after filing.
      • Defines “cash assets” as cash over $100,000 in checking/savings (excluding wages reported during that period).
    3. Administrative or clerical error by the agency — waiver applies from date the error occurred (or from first day of first week when date cannot be determined).
  • Intentional false statements or concealment:
    • If a claimant intentionally misrepresents or conceals material information to obtain benefits, the agency shall cancel the claimant’s rights to benefits for that benefit year as of the date of the false act and exclude wages used to establish that benefit year from establishing another benefit year.
    • No waivers of recovery/interest for intentional fraud.
    • Employers may protest to prevent establishment of a successive benefit year when a determination or tribunal finds a false statement or concealment.

Who is affected

  • Claimants: gain clearer time limits, expanded waiver options (hardship, agency error, and certain employer reporting errors), and protection from more than 50% benefit withholding; but face cancellation of benefits if found to have intentionally committed fraud.
  • Employers: may be affected by wage-reporting disputes and by agency determinations that disallow use of certain wages to establish successive benefit years when fraud is found.
  • Unemployment Insurance Agency: additional procedural obligations (deadlines, waiver processing, refunding), and administrative workload for hardship determinations.
  • State collections and treasury: potential reduction in recoverable overpayments due to waivers and time limits; impacts depend on volume and nature of cases.

Procedural/timeline notes

  • Introduced 03/13/2025; read first time and committee referral occurred 09/18/2025. The bill modifies existing statute as last amended by 2024 PA 238.
  • Many provisions hinge on “3-year” statutory deadlines and on finality dates of agency determinations or appeals; exceptions exist for suspected identity fraud and for intentional misrepresentation.

Potential considerations

  • Increased protections and clearer deadlines for claimants may reduce litigation and promote equitable outcomes in cases of agency error or hardship.
  • The 50% cap on benefit deductions and expanded waiver rules could lower net recoveries of overpayments, affecting UI trust fund balances.
  • Administrative burden on the agency may rise due to processing hardship waivers and refunding payments if waivers are later granted.

Compiled from official sources — confirm details with the bill’s official record.

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