New Changes to Delaware’s Overpayment Recovery Act

A new law in Delaware introduces significant changes to the statute of limitations regarding the Delaware Department of Labor’s ability to pursue civil actions for the recovery of overpaid unemployment benefits. Under this law, a five-year statute of limitations is established for the Department to initiate civil actions to recover nonfraudulent overpayment debts. In contrast, there is no specific time limit imposed for the Department to recover overpayment debts resulting from fraud.

It’s important to note that this amendment applies to overpayment debts that are still within the statute of limitations period. This includes debts that have accumulated less than three years before the enactment of this new law.

Furthermore, the legislation reaffirms the existing practice of no fixed deadline for the Department to collect overpayment debts. The Department can continue to recover these debts through various means, including offsetting future benefits, utilizing state Department of Revenue offsets, and federal Treasury offsets of tax refunds. The latter method is mandated by federal law.

Finally, the law introduces an overpayment waiver program, which is retroactively effective dating back to the beginning of the COVID-19 pandemic. This program grants the Department the authority to waive non-fraudulent overpayments of traditional unemployment benefits in cases where the overpayment resulted from either Department errors or claimants receiving specific low-income public assistance.