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 occurs when the EDD decides that you’re not entitled to benefits you already received. Overpayments occur for different reasons, including an error on the department’s side when they issue funds. However, some people fraudulently claim payments.
Regardless of the situation, the EDD will send a notice of overpayment to you. The notice demands the repayment of funds. If you don’t create a repayment plan or comply with the EDD, they’ll collect the debt through different methods.
How Does the EDD Collect Payments
EDD payment collection is swift and aggressive. If you don’t discuss payment options or prove that you owe nothing, the department will collect money in one of several ways. Here are some common collection methods.
- Wage garnishment: The EDD can send an order to your employer to withhold a portion of your paycheck for repayment.
- Interception of tax returns: The Franchise Tax Board and IRS can withhold a portion or entirety of your California state and federal income tax return.
- Unemployment/disability: The EDD can deduct weekly payments from your unemployment or disability benefits.
- Lottery winnings: If you win the lottery, the EDD can contact the State Lottery and instruct them to withhold your winnings.
Don’t Ignore Overpayments
A notice of overpayment is something that you should address quickly. You should never ignore an EDD overpayment because you’ll face aggressive collection methods by the department if you do. The collections can hurt your credit score, affect future benefit payments, and leave you with high-interest debt.
Even if you’re not at fault, it’s critical to contact the EDD to understand why you received an overpayment notice. The quicker you address the issue, the faster you can resolve it!
Ultimately, you can create a repayment plan or appeal the notice. By communicating with the EDD, you acknowledge the overpayment notice and commit yourself to fixing the problem.
Get Legal Assistance
When dealing with the EDD, it helps to have an experienced overpayment lawyer on your side! Here at Pershing Square Law Firm, we’re familiar with the EDD penalties. Appealing overpayments is complicated, and we’re here to support you. Don’t face the EDD alone!