What happens if you don't pay back a California EDD unemployment overpayment?

The waiver option is real - I got an overpayment waiver approved last year. You have to show financial hardship and that the overpayment wasn't your fault. The form is DE 1446 I think. Was not easy but definitely worth trying.

Wait so the 25% withholding - does that mean if I eventually need unemployment again they'd just take 25% of each payment automatically? That actually doesn't sound as catastrophic as I was imagining. I was picturing them coming after my bank account immediately.

Yes exactly - for non-fraud overpayments the offset from future benefits is the most common collection method. The more aggressive collection (FTB referral, wage garnishment) typically happens when someone ignores the debt entirely for an extended period. That's why responding and setting up a payment arrangement or requesting a waiver is so critical.

Did they take the full 25% or more? And did they at least tell you how much was left on the balance each time?

they took 25% each week and yeah there was a running balance on my UI Online account. took about 14 weeks of claims to pay it down. annoying but manageable compared to what I thought would happen

same happened to my cousin. he just let the payments chip away at it. not ideal but the world didn't end

I didn't even think about this angle. Is there a way to request the documentation they used to calculate the overpayment? I want to see exactly where the discrepancy came from.

Yes - you can request your complete claim file. Go to UI Online and look for the determination letter details, or you can request the claim records formally. If you file an appeal you'll be able to see all the wage information EDD used. The appeal form is DE 1000M.

THIS. EDD makes mistakes constantly. My overpayment was based on employer-reported wages that didn't match my actual pay stubs. Took 3 months to resolve through appeal but the whole thing got wiped out.

I've been having the exact same problem getting through to EDD. Been trying for weeks. Going to check out that Claimyr link, thanks for sharing.

does this actually work? I've been trying to reach EDD for a completely different issue and I'm at my wit's end with the phone situation

Yeah it worked for me. I'd been trying for two weeks straight on my own and couldn't get through once. Used Claimyr and had an agent on the line within the same day. The agent was actually really helpful about the overpayment repayment plan options.

seconding this - used it for an adjudication issue and it was worth it just to finally talk to a real human at EDD

This is exactly what I was afraid of. How much was his overpayment if you don't mind me asking? I'm wondering at what dollar threshold they start doing things like liens.

It was around $6,000 so not that far from yours. I don't know if there's a specific threshold but FTB doesn't mess around once EDD hands it off to them. The lien thing was a whole ordeal to get cleared even after he paid.

FTB referral is no joke. They can also levy bank accounts. EDD overpayments don't just disappear if you ignore them.

The notice I got doesn't say anything about fraud, so I'm hoping it's the non-fraud type. Is there a specific language on the notice that designates which type it is?

Yes - fraud overpayments will explicitly say fraud or cite a specific penalty code (usually Section 1257 or related fraud sections). If your notice cites Section 1375 or 1382 those are typically non-fraud overpayment codes. Look at the bottom of the determination letter for the statutory basis.

Good info. Also worth noting that waiver applications have to be submitted before you pay off the debt - once you've paid you can't go back and request a waiver for amounts already paid. So if financial hardship waiver is an option for OP, do that before making any payments.

This is reassuring honestly. I've been in a similar avoidance mode which is part of why I'm asking on here instead of just calling. What number did you use to get through? I've had terrible luck reaching anyone.

I used one of those call assistance services to get through. The regular EDD number was impossible. Once I actually got a human they were pretty reasonable about setting up the payment plan, the hard part was just the getting through part.

the payment plan option is underutilized. people assume EDD wants them to pay everything at once but they actually prefer people to engage and set up a plan vs just going silent

Great question and yes, technically both can happen simultaneously. However when you're filing weekly claims and have an active payment plan, you can request that EDD use the benefit offset to satisfy your payment plan rather than having both taken at once. This requires talking to an agent to set up properly though.

Oh wow that's actually good to know. The double-hit scenario was what I was worried about. So it's not automatic that both happen but you have to actively coordinate it?

Correct - the benefit offset is somewhat automatic but a coordinated agent conversation can prevent the double-dipping scenario. This is another situation where actually getting through to EDD by phone is really important.

They can't deny a new valid claim solely because of an existing overpayment - you still have the right to benefits if you meet eligibility requirements. What they WILL do is offset the payments as discussed. The exception is if the overpayment was due to fraud, in which case there can be additional disqualification periods.

ok that's good to know. my friend told me you just get completely blocked from UI forever if you have an overpayment and that seemed extreme

Your friend is wrong - that's a common misconception. Overpayment ≠ permanent disqualification. The offset/withholding is the primary enforcement mechanism for active claimants, not blocking the claim entirely.

We're in this together then lol. I'm going to look into the appeal first since I genuinely think there might be a data error, and then waiver as backup. Good luck to you.

Good luck to you too. This stuff is so stressful. The fact that there are actual options besides just paying immediately or having your life ruined is genuinely reassuring.

I had no idea this was even an option. Is this something an EDD agent can help set up or does it require an attorney?

An EDD agent can explain the process but for a compromise of this type it might be worth a consultation with an unemployment attorney, many do free initial consultations. California has nonprofit legal aid organizations that specifically help with EDD issues too.

Good add. Bay Area Legal Aid and Bet Tzedek in LA both have unemployment assistance programs. For people who can't afford an attorney these resources are invaluable.

Ugh this is exactly the kind of thing that makes dealing with EDD so exhausting. Did you have trouble getting through on the phone?

Yes the phone situation was rough until I found a better way to get connected. Once I actually got through the agent set up the payment plan in literally 10 minutes. The barrier is just getting to a human.

The EDD website has been glitchy for months. I've had multiple forms just disappear after submission with no confirmation. Always follow up by phone on anything important.

This is honestly terrifying. How did it eventually get resolved?

Took about 2 months of back and forth with both EDD and FTB with my documentation. Eventually FTB confirmed the payments and recalled the collection action but it was an absolute nightmare. Always pay in a way that generates a paper trail - never cash, always check or online with confirmation numbers.

This happened to someone I know too. EDD and FTB don't always communicate cleanly. Your advice about documentation is critical. Keep everything.

Going to try this today. I've been putting off calling EDD because I know I'll just get a busy signal or get disconnected and then I get more anxious. If there's actually a way to get through it might help me stop avoiding the whole thing.

Same - I'll give it a shot. I need to understand whether my situation qualifies for the waiver and that's definitely a conversation that needs to happen with an actual agent who can see my account.

good point for people with smaller overpayments. for bigger ones like OP's though that's just not realistic

Totally agree - for $4,800+ payment plan or waiver route makes way more sense. Was just throwing it out there for anyone in the sub-$1,500 range who might not realize that option exists.

Yeah $4,800 lump sum is definitely not happening for me right now lol but useful info for sure

EDD itself doesn't directly report to credit bureaus - the credit impact happens when the debt gets referred to FTB or goes to an outside collections agency. So there's a window if you're proactive. Engaging EDD now with a payment plan or waiver request should prevent it from reaching the credit-reporting stage.

Oh that's actually really reassuring. So as long as I'm actively working on a resolution it shouldn't hit my credit?

That's generally correct for non-fraud overpayments where you're engaged with a payment plan or waiver process. The credit risk is really for people who go completely silent and let it default to collections. Active engagement is your protection.

This is really helpful to know - that they pause collection while a waiver is being reviewed. Did they tell you what your chances of approval were or give any indication?

The agent was pretty neutral about it but said demonstrating current monthly income vs expenses showing the repayment would cause genuine hardship is the key factor. She actually helped me understand what documentation to include which was helpful.

This is giving me motivation to actually make the call. The fact that there's a hold on collection while the waiver processes makes it less scary.

How do you file a protective appeal exactly? Just submit the DE 1000M form even if you're still gathering information?

Exactly - file the DE 1000M with a brief statement like 'I believe this determination may be in error and am requesting an appeal hearing while I gather supporting documentation.' That preserves your rights. You can then take the time to build your actual case.

This is excellent advice. File first, investigate second. The appeal can always be withdrawn but a missed deadline usually can't be remedied.

I completely understand the anxiety - I've been the same way. But yeah knowing the options exist makes it feel much less like a death sentence. You've got this.

Same boat here. This community is actually genuinely helpful which is rare on the internet lol

Going to try Claimyr to get through to an EDD agent this week after reading this thread. The part about submitting the waiver and getting collection paused while it processes is the first actually actionable thing I've heard. Thank you all seriously.