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Employment Development Department
Employment Development Department

Overpayments and Penalties

A Notice of Overpayment is mailed to you when you have been paid UI benefits that you were not eligible to receive. The Notice shows the amount of the overpayment and penalties, if any. It explains why you were overpaid and gives you information about your appeal rights.

The EDD classifies overpayments into two categories: non-fraud or fraud.

Non-Fraud: When you have received benefits to which you were not entitled and you are not at fault, the overpayment is considered non-fraud. In some cases, you may not have to repay a non-fraud overpayment. You will receive a notice telling you if the overpayment must be repaid.

Fraud: A fraud overpayment occurs when you knowingly give false information or withhold information and as a result receive benefits that you should not have received. Withholding or giving false information to obtain unemployment insurance benefits is a serious offense that can result in criminal prosecution. With a fraud overpayment, you are assessed a penalty in the amount of 30 percent of the amount of the overpayment and a false statement disqualification of 5 to 23 weeks. Fraud overpayments and penalties must be repaid.

If you do not repay your overpayment promptly, EDD can deduct the money owed from your future weekly unemployment or state insurance benefits. This process is referred to as an offset. EDD may also:

For more information about repaying overpayments and the EDD deducting money owed to you, visit the Your Tax Return or Lottery Money page.

If you have an UI overpayment and would like more information on the overpayment balance and how to pay benefit overpayments, call the EDD Benefit Overpayment Collection Section at 1-800-676-5737.

NOTE: Repaying an overpayment does not remove a disqualification. Call the EDD at one of the UI Phone Numbers for more information about disqualifications and penalties.

Program Purpose

As a federally funded and mandated program, the EDD is required to follow Benefit Payment Control (BPC) regulations. The overpayment function is a component of the BPC program.

The purpose of the BPC program is to:

Legal Authority

The legal authority for the BPC program can be found in the provisions of the Social Security Act (Title III) and the Internal Revenue Code. The interpretation of the Social Security Act for federal and state requirements is contained in the following codes and regulations: