House Bill 5169

House Bill 5169

Topic: Interest on Overpayments
Sponsor: Representative Beau LaFave (R)
Introduced: October 24, 2017
Status: Review by the House Oversight Committee

ISSUE WITH CURRENT LAW: Michigan charges 1% monthly interest on all overpayments.

WHAT THE NEW BILL DOES:

  • No interest will be assessed if the overpayment was due to an Agency error.
  • Interest begins accruing one year after a final adjudication if there was a non-fraud overpayment not caused by Agency error.
  • Interest applies immediately if fraud is found.

HOW THE NEW BILL HELPS CLAIMANTS:

  • Claimants who were overpaid due to Agency error no longer have to pay interest on the restitution owed to the Agency. This saves claimant’s enormous money and rightfully places the burden on the Agency for its own errors.
  • The new bill provides a one year window to claimants before interest accrues in non-fraud overpayment situations. This enables claimants to pay off the restitution owed before interest begins to accrue.