The Employment Development Department (EDD) issues benefit payments to eligible claimants. If the department decides you’re not eligible for benefits, they’ll take legal action. Discover why you should never ignore an EDD overpayment by reading this post.
Understanding EDD Overpayments
A benefit overpayment is when you collect unemployment, disability, or Paid Family Leave benefits you are not eligible to receive. It can result from:
- Fraudulent overpayments — you knowingly misreported info (unreported wages, failure to disclose work)
- Non‑fraud overpayments — due to errors, delays, misunderstandings, or late processing of eligibility data .
EDD categorizes them differently:
| Tipe | Definition | Possible Penality |
| Fraud | Intentional false statements or omissions | 30% fine + denial of benefits up to 23 weeks |
| Non-fraud | No intent to deceive; repaid as standard | No penalty beyond repayment |
How are you notified?
The process starts with a Notice of Potential Overpayment (DE 1447) listing possibly ineligible weeks. You typically have 14–15 days to respond otherwise EDD proceeds with a formal overpayment notice. After that, you receive a Notice of Overpayment (DE 1444) with exact amounts and instructions to appeal. If denied, it’s followed by the Benefit Overpayment Collection Notice (DE 8344JUDR) 30 days later, which includes your Claimant and Letter IDs required for repayment.
Your rights: You have 30 days (from notice mailing date) to appeal in writing Appeal Form (DE 1000M) (PDF) or a letter explaining your disagreement.
Repay Your Overpayment
You cannot repay your overpayment online until you receive a Benefit Overpayment Collection Notice (DE 8344JUDR) with your Claimant ID and Letter ID..You can repay your overpayment by check before receiving the Benefit Overpayment Collection Notice. Review your Notice of Overpayment for instructions.
Payment Options
Enroll in Benefit Overpayment Services
Before enrolling in Benefit Overpayment Services, you must first create a myEDD account and select a login verification method. For more information on what you need to create a myEDD account, visit myEDD FAQs.
To create a myEDD account:
- Visit myEDD.
- Select Create Account.
After you’ve created your myEDD account, log in to myEDD and select Benefit Overpayment Services to begin your enrollment.
Important: To enroll in Benefit Overpayment Services, you need your:
- Claimant ID
- Letter ID
- Date of Birth
- Email Address
Where to find your Letter ID and Claimant ID
Payments
In Benefit Overpayment Services, you can make a payment, view past payments, and set up an installment agreement to make monthly payments.
- Make a payment
- View past payments
- Set up an installment agreement
Contact EDD
Contact the Benefit Overpayment Collection Section at 1-800-676-5737 during normal business hours. You can also visit Ask EDD to change your mailing address or phone number.
Additional Resources
- myEDD Overview and Registration for New Users (YouTube)
- Enroll in Benefit Overpayment Services (YouTube)
- Make a Payment in Benefit Overpayment Services (YouTube)
- Set Up an Installment Agreement in Benefit Overpayment Services (YouTube)
- Benefit Overpayments FAQs
How Does the EDD Collect Payments
If you fail to repay or appeal, EDD has strong legal tools to recover the debt:
- Benefit Offset
- Non‑fraud: EDD may withhold 25% of future benefits.
- Fraud: they can withhold 100% plus the 30% fine (penalty can’t be offset).
- Tax Refund Intercepts
EDD can take both state and federal refunds under Gov’t Code § 12419.5 and IRS Treasury Offset Program.
- Lottery or Unclaimed Funds
The state can apply liens even on lottery winnings or other receivables.
- Wage Garnishments & Bank Levies
Up to 25% of your disposable earnings may be garnished. If you already have child support, loans, or other garnishments, all debts share that 25% cap.
- Liens on Property
EDD may file an abstract of judgment to create a lien on your home or personal property, which won’t clear until fully paid (including court costs, interest).
- Court Action
EDD may file for summary judgment — a civil court action — to obtain judgment plus costs .
These aggressive collection steps ensure EDD eventually recovers what it’s owed.
Don’t Ignore Overpayments
Ignoring an overpayment isn’t a neutral stance — it’s a self‑inflicted crisis. Consequences include:
High penalties & interest
- Fraud cases add a 30% penalty. All unpaid balances accrue interest and collection fees.
- Withhold your state lottery winnings.
- Withhold other money the state owes you.
- File a claim against you in court.
- Charge you court costs and interest.
- Record a lien on your property.
- Loss of future benefits
Fraud determinations disqualify you for up to 23 weeks of future unemployment
- Credit risk & financial hardships
Liens damage credit, limit your ability to refinance or sell, and create legal fees . - Seizure of income & assets
Garnishments, tax intercepts, and levies can disrupt your finances; the state even seizes lottery prizes - Stress and lost opportunity
Escalations can drag on for years; California maintains a 30‑year statute of limitations on state debt.
Get Legal Assistance
When dealing with the EDD, having an experienced overpayment lawyer on your side can make all the difference. At Pershing Square Law Firm, we understand the complexities of EDD penalties and collection practices. Whether you’re disputing a fraud determination or requesting a waiver, we’re here to guide you through the process. Don’t face the EDD alone—start your unemployment benefit appeal with trusted legal support.
