LOUISVILLE, Ky. (WDRB) — During the COVID-19 pandemic, thousands of Kentuckians suddenly found themselves out of work, including Scott Clark of Oldham County, a handyman who relied on unemployment benefits to support his family.
“We filled out for unemployment,” Clark said. “My wife got approved first, then I got approved.”
But Kentucky’s unemployment system, which still relies on computer software dating back to the 1970s, struggled to manage the surge in claims during the pandemic.
“The only reason I did it was, during pandemic, I had to pay bills, and they offered it,” Clark said. “You can apply for the Pandemic Relief Fund, so that’s what we did. Now, they want it all back and then some.”
Clark said he has received more than 10 letters from the state saying he was overpaid unemployment benefits and must repay the money or risk a lien being placed on his property.
One letter states the overpayment was discovered because of “an office error.” Another notice says Clark was overpaid $4,200 in 2021, while a separate letter says he received an additional $3,900. Clark said the total has continued to increase.
“It’s doubled,” he said. “Now, it’s $23,000.”
The letters note that interest and penalties are zero.
State officials declined interview requests. However, WDRB Investigates learned the state sent 38,476 overpayment letters tied to pandemic-era unemployment benefits.
“Of the 38,476 overpayment letters that were sent, 34,704 letters were found not at fault and the payment was waived,” said Rosalind Harvey, a spokesperson for the Kentucky Education and Labor Cabinet.
She added, “UI identified a total of $31,667,274 in overpayments that must be paid back under state and federal law. This time of year, it’s typical to see a seasonal rise in the number of unemployment claims. OUI is reporting higher call volumes which is leading to longer wait times. The agency is taking proactive steps to help Kentuckians submit claims without waiting in line to speak with a customer service representative.”
Clark said his wife received one of the waivers. Her letter stated she did not need to repay $2,464 because the overpayment resulted from a “departmental error.”
Harvey said the pandemic placed extraordinary pressure on unemployment systems across the country.
“Like every state across the country, the COVID pandemic put unprecedented stress on unemployment systems, the majority of which were federally funded through temporary pandemic relief programs,” Harvey said in a written statement. “Due to the unprecedented circumstances of the pandemic … the federal Department of Labor issued guidance following the pandemic instructing states that many of these types of overpayments may be waived if the claimant was not at fault for the overpayment, and paying it back would be against equity and good conscience, meaning it would be unfair to the claimant and cause unnecessary financial hardship.”
Clark said state officials told him the overpayment stemmed from missing tax records.
“They said the reason I owed it was because they never got my 2020 taxes,” Clark said. “So I said ‘If I send my 2020 taxes, will that take care of it?’ They said ‘Oh yeah, that’ll take care of it.’ So we sent it in. They sent us a letter back saying it’s not going to take care of it.”
Clark said calling the unemployment office often leads to an automated message.
“We apologize, but we’re currently experiencing a high call volume,” the recording says. “Please try your call again.”
“That’s how it is. You can’t get ahold of them,” Clark said. “You can’t get a hold of them, you can’t get any answers. Yet they tell you you owe all this money. It’s kind of like ‘show me proof.’ They’ve never sent me any proof.”
Kentucky has signed a $55.5 million contract with Deloitte Consulting to replace the outdated unemployment system. The first phase, which updates the employer tax system, is expected to launch in mid-2026. A second phase focused on unemployment claims, payments, benefits and appeals is not expected to be ready until 2028.
Clark said he wants to be treated the same way as his wife.
“Just drop it, like they did to my wife,” he said. “Now they’re going after me. I don’t know why.”
After WDRB Investigates asked the state about Clark’s case, Harvey said the office “determined the overpayment was an error that will be waived.”
WDRB also has an open records request with the state that has not yet been fulfilled
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