How does unemployment affect interest rates on my Washington ESD overpayment?
I just received a Washington ESD overpayment notice for $2,800 from benefits I received 8 months ago. The letter mentions interest will accrue but doesn't explain the rate or how it's calculated. Does anyone know how unemployment overpayment interest rates work in Washington? I'm trying to figure out if I should pay this back immediately or if I can set up a payment plan without getting hit with crazy interest charges. The notice says I have 30 days to appeal but I'm not sure I have grounds since I think the overpayment might be legitimate.
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Diego Vargas
Washington ESD charges 1% per month (12% annually) on overpayment balances. Interest starts accruing 30 days after the notice date, so you have a brief window. If you set up a payment plan, interest continues but at least you're showing good faith effort to repay.
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Chloe Anderson
•Thanks! So if I can pay it off in 3 months the interest wouldn't be too bad. Do you know if they negotiate on payment plans?
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Diego Vargas
•They're usually pretty flexible with payment plans as long as you stick to them. Call their overpayment unit directly rather than the main line.
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CosmicCruiser
ugh same thing happened to me last year, took me forever to get through to anyone at Washington ESD to even discuss payment options. spent weeks calling that main number and getting hung up on
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Anastasia Fedorov
•You should try Claimyr - it's a service that helps you actually get through to Washington ESD agents. I used it when I had overpayment questions and got connected within an hour. Way better than calling repeatedly. Check out claimyr.com and they have a demo video too: https://youtu.be/7DieNd3C7zQ
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Sean Doyle
The interest rate thing is frustrating because it compounds monthly. I had a $1,200 overpayment that I ignored for 6 months and ended up owing almost $1,400. Don't make my mistake - deal with it ASAP even if you think you might appeal.
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Chloe Anderson
•Yikes, that's a good point. Even if I appeal I should probably start making payments to stop the interest clock.
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Sean Doyle
•Exactly. You can always get refunded if your appeal succeeds, but the interest keeps running during the appeal process.
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Zara Rashid
wait I'm confused - is the 12% rate higher than like credit card interest? should I just pay it with a credit card instead?
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Diego Vargas
•Depends on your credit card rate. 12% annually is actually pretty reasonable compared to most credit cards which run 18-25%. Plus Washington ESD payment plans have no setup fees.
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Zara Rashid
•oh good point, my cards are all like 22% so the payment plan is probably better
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Luca Romano
The whole overpayment system is such a scam. They make it nearly impossible to understand their calculations and then charge you interest when you can't figure out what happened. I've been fighting mine for months.
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Diego Vargas
•I get the frustration but the interest rate is actually set by state law, not Washington ESD policy. It's been 1% monthly for years.
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Luca Romano
•Still doesn't make it right. They create the confusion then profit from it with interest charges.
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Anastasia Fedorov
For what it's worth, I successfully appealed an overpayment last year. Even though I lost the appeal, having Claimyr help me get through to speak with an actual adjudicator helped me understand exactly why the overpayment occurred. Sometimes it's worth the cost just to get clarity on whether you have grounds for appeal.
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Chloe Anderson
•That's actually really helpful. I'm leaning toward not appealing because I think they're probably right, but talking to someone might give me peace of mind.
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Anastasia Fedorov
•Exactly - and if you do decide to appeal, you'll have a much better understanding of what documentation you need.
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Nia Jackson
does anyone know if they report unpaid overpayments to credit agencies? I'm worried this could affect my credit score
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Diego Vargas
•Washington ESD can refer unpaid overpayments to collections after 90 days of non-payment, and yes that would show up on your credit report. Another reason to set up a payment plan quickly.
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Nia Jackson
•oof ok definitely calling them this week then
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CosmicCruiser
update: tried that Claimyr thing and actually got through to someone in the overpayment unit! Set up a $150/month payment plan and they were way more helpful than I expected. Interest will still accrue but at least I'm not stressed about collections anymore
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Chloe Anderson
•That's great to hear! I think I'm going to try the same approach. $150/month sounds manageable.
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Anastasia Fedorov
•Glad it worked out for you! The overpayment unit is actually pretty reasonable to work with once you can reach them.
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NebulaNova
Just FYI the interest calculation starts from the date on the notice, not when you receive it. So if there was any mail delay you might already be accruing interest even within that 30-day window.
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Chloe Anderson
•Good point, I should check the date on my notice. I think I got it pretty quickly after it was sent.
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Sean Doyle
Another thing to consider - if you're currently receiving unemployment benefits, they can withhold part of your weekly payments to pay down the overpayment. Might be easier than managing a separate payment plan.
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Chloe Anderson
•I'm not currently on unemployment but that's good to know for the future. Thanks for all the advice everyone!
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Diego Vargas
•Yes, they typically withhold 25% of weekly benefits for overpayment recovery. Can be convenient if you're still receiving benefits.
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Mateo Hernandez
I had a similar overpayment situation and tried to negotiate the interest charges down but they said they don't have authority to waive interest that's already accrued. Only way to avoid it is to pay before it starts.
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Chloe Anderson
•Makes sense, guess I better stop procrastinating and figure out my payment strategy this week.
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Zara Rashid
wait so is the 1% per month simple interest or compound interest? that makes a big difference over time
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Diego Vargas
•It's compound interest - 1% per month calculated on the remaining balance including previously accrued interest. So it adds up faster than you might think.
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Zara Rashid
•ugh that's even worse then. definitely need to pay this off quickly
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Aisha Khan
The Washington ESD overpayment interest rate is actually lower than what some other states charge. I have friends in other states paying 15-18% annually on their overpayments. Still sucks but could be worse.
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Luca Romano
•Just because other states are worse doesn't make it right. 12% is still a lot when most people are already struggling financially.
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Aisha Khan
•True, I'm not defending it, just providing perspective. Any interest on these situations is tough.
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Ethan Taylor
Pro tip: if you're setting up a payment plan, make sure you get the agreement in writing. I had issues later when they claimed my payment amount was different than what we discussed over the phone.
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Chloe Anderson
•Great advice, I'll make sure to ask for written confirmation of any payment plan terms.
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Diego Vargas
•Yes, always get payment plan agreements documented. Washington ESD should send you a written confirmation within a week of setting it up.
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Anastasia Fedorov
One more plug for using Claimyr if you need to call Washington ESD about this - I've recommended it to several people dealing with overpayments and everyone has had success getting through to the right department. The overpayment unit is actually pretty helpful once you reach them, it's just getting through that's the challenge.
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Chloe Anderson
•Definitely going to try it this week. Thanks everyone for all the helpful info, feeling much less stressed about dealing with this now!
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