Capitol News

Senator Lana Theis has introduced new legislation aimed at protecting Michigan residents from having to repay unemployment benefits they received during the COVID-19 pandemic. The announcement was made on Thursday in Lansing.

Theis, a Republican from Brighton, said that many Michigan residents applied for and received unemployment benefits honestly and according to state guidance at the time of the pandemic. She noted that years later, some are being told they were "overpaid" and now face collection actions, with some individuals owing tens of thousands of dollars.

“During COVID-19, thousands of Michigan residents applied for unemployment benefits honestly and in good faith — following the guidance the state provided at the time,” Theis said. “Years later, many are being told they were ‘overpaid’ and are now facing collection actions — sometimes in the tens of thousands of dollars. These clawbacks are creating severe financial hardship for people who did nothing wrong; they relied on the state’s instructions and accepted benefits the state told them they were entitled to receive.”

Theis reported hearing from dozens of constituents who are being asked to repay funds already spent on basic needs such as rent, groceries, medicine, and utilities during a period marked by significant financial challenges.

“My bill restores fairness,” Theis said. “We can and should distinguish between bad actors and honest claimants who followed the rules as they understood them. It recognizes that agency errors, evolving federal guidance and system design contributed to overpayments. Honest claimants should not be punished for relying on the state’s own determinations.”

The proposed legislation would amend the Michigan Employment Security Act to allow the state to waive repayment efforts for those who applied honestly and received benefits in good faith. According to Theis, this would enable state agencies to focus resources on identifying actual fraud instead of pursuing collections from individuals who acted according to official instructions.

“This legislation is about common sense and compassion,” Theis said. “Families should not be forced into financial crisis because of government mistakes. Instead, we should be focusing on rooting out fraud and making sure our system works for those who need it most.”

Senate Bill 625 was introduced on October 23 and has been referred to the Senate Committee on Labor.