Tuesday, November 10, 2015

UC - fault overpayment - # penalty weeks - discretion - mitigating circumstances

Williams v. UCBR – Cmwlth. Court – November 10, 2015 – unreported memorandum opinion*



Claimant admittedly filed false claims for benefits, but later herself brought that matter to the Department’s attention.


Claimant’s admission of wrongdoing does not excuse a fault overpayment

The fact that Claimant brought the improper benefits to the Department’s attention after the fact on her own initiative, however, does not alter the fact that the overpayment was obtained by misrepresentation and is not a ground for reversing a fault overpayment. McKean v. UCBR, 94 A.3d 1110, 1114-15 (Pa. Cmwlth. 2014) (upholding fault overpayment despite fact that claimant notified Department of unreported income one month after the last overpayment).


15% penalty v. penalty weeks

In addition to fault overpayment, under Section 801 of the Law, a claimant who “makes a false statement knowing it to be false, or knowingly fails to disclose a material fact to obtain or increase compensation” is subject to penalty weeks disqualifying her from receiving future benefits and a penalty of 15% of the overpaid benefits that she received. 43 P.S. § 871(b),(c);4 Chishko, 934 A.2d at 178.


The Board’s findings that Claimant’s conduct constituted knowing misrepresentation and that it was done to obtain benefits that she was not eligible to receive and that she obtained the benefits by fraud satisfy the requirements for imposition of these penalties. Castello, 86 A.3d at 299; Chishko, 934 A.2d at 178.  The Board therefore did not err in affirming the 15% penalty imposed by the Department. Section 801(c) provides that the 15% penalty is mandatory where the Board has found that a claimant knowingly made a false representation concerning her eligibility or knowingly failed to disclose such information to obtain benefits. 43 P.S. § 871(c) (“Whoever makes a false statement knowing it to be false, or knowingly fails to disclose a material fact to obtain or increase compensation … and as a result receives compensation to which he is not entitled shall be liable to pay to the Unemployment Compensation Fund a sum equal to fifteen per centum (15%) of the amount of the compensation”)


Penalty weeks, however, are not automatic upon a finding of conduct sufficient to support a penalty. Section 801(b) provides that a claimant who has made knowing misrepresentations or omissions to obtain benefits “may be disqualified in addition to such week or weeks of improper payments for a penalty period of two weeks and for not more than one additional week for each such week of improper payment.” 43 P.S. § 871(b).  (emphasis added) Here, the Board found that Claimant reported the fraudulent claims to the Department in 2011, and Department records showed that Claimant expressed a willingness to repay the benefits in 2011, but was told to await an overpayment letter that the Department did not send.  

While self-reporting does not preclude the imposition of penalty weeks, McKean, 94 A.3d at 1114-15, these facts are relevant to the seriousness of Claimant’s misconduct and therefore can bear on the discretionary determination as to whether penalty weeks are appropriate and whether the number of penalty weeks imposed should be less than maximum permitted by Section 801(b). [emphasis added]


The Department imposed and the Board upheld the maximum number of penalty weeks permitted for this 11-week overpayment, 13 penalty weeks, with no consideration of the unusual mitigating circumstances in this case. The only reason given by the Department for its imposition of the maximum penalty weeks was that Claimant knew that she was ineligible when she filed for benefits and was therefore subject to penalty weeks.  The referee and the Board held only that “penalty weeks” were “appropriate,” and did not discuss their finding that Claimant reported the fraud to the Department in 2011 or rule on the issue whether imposition of the maximum penalty weeks was appropriate.


Because the Board did not consider relevant facts established by both its findings and the record, and did not address the issue of whether the maximum penalty weeks were properly imposed, the Board’s affirmance of the imposition of 13 penalty weeks must be vacated and the issue of penalty weeks must be remanded to the Board. See Dorn v. UCBR, 866 A.2d 497, 501-02 (Pa. Cmwlth. 2005) (remand required where Board failed to make necessary findings or failed to address evidence); Kowal v. UCBR, 465 A.2d 1322, 1323 (Pa. Cmwlth. 1983) (remand required where Board failed to address issue and make necessary findings).


The court thus affirmed the Board’s order on ineligibility, the fault overpayment and the imposition of a 15% penalty, but remanded the issue of penalty weeks to the Board to consider whether and how many penalty weeks are appropriate.



*An unreported case may not be cited “binding precedent” but can be cited “for its persuasive value. . . .”  See 210 Pa. Code § 69.414 (a); Pa. R.A.P.  3716 [45 Pa.B. 3975; July 25, 2015]

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