Texas Workforce Commission collected $1.2 billion in UI overpayments in a recent fiscal year — one of the highest volumes in the nation, reflecting both high claim volumes and strict enforcement. If you receive a TWC Notice of Overpayment, you owe that amount back regardless of whether the error was yours or TWC's. The rules are different depending on whether fraud was involved.
- All TWC overpayments must be repaid, whether caused by claimant error, employer dispute reversal, or TWC processing error.
- If fraud is found, TWC can add a 15% penalty and refer the case for criminal prosecution. Do not misrepresent earnings or availability.
- If you cannot pay immediately, contact TWC to arrange a repayment plan through UBS or at 800-939-6631.
Always verify exact numbers, deadlines, and forms on the Texas Workforce Commission's official website – this page provides general guidance, not state-specific legal advice.
How TWC Overpayments Are Created
TWC overpayments happen when you receive UI benefits you were not entitled to. The most common causes:
- Employer appeal reversal — You were initially approved, collected benefits, and then your employer won an appeal that overturned the approval. All benefits paid during that period become an overpayment.
- Unreported or underreported earnings — You worked but did not accurately report gross earnings during certification. TWC cross-references employer wage reports with your certifications.
- Availability issues — You certified that you were available for work during weeks you were not (traveling, incapacitated, or turned down work).
- Return to work — You returned to full-time employment but continued certifying past your last eligible week.
- Identity fraud — Someone else filed using your identity. TWC distinguishes between identity fraud (not your fault) and fraudulent misrepresentation (disqualifying).
What Happens When TWC Issues an Overpayment Notice
TWC sends a Notice of Overpayment by mail with the amount owed, the weeks involved, and the reason for the overpayment. You have 14 days to appeal the overpayment determination if you believe it is incorrect. If you do not appeal, the amount becomes final and TWC begins collection.
TWC collection methods include: intercepting future UI benefit payments (if you file again), intercepting Texas state tax refunds, wage garnishment through court order, and referral to the Texas Attorney General's office for further collection action. TWC can also report the debt to credit bureaus. The commission takes overpayment recovery seriously and has legal authority to pursue collection aggressively.
How to Dispute or Repay
If you believe the overpayment amount or reason is wrong, appeal within 14 days. The process is the same as appealing a benefits denial — file through UBS or by mail. At the hearing, you can present evidence that the benefits were correctly paid (for example, if TWC's wage cross-reference is based on earnings you already reported).
If the overpayment is valid, contact TWC to set up a repayment plan. You can pay online through UBS or by calling 512-936-3338. TWC allows installment payments but will continue collecting from any future benefits until the balance is cleared. The longer repayment takes, the more weeks of future benefits TWC withholds to satisfy the debt.
Fraud vs. Non-Fraud Overpayments
TWC distinguishes between overpayments caused by claimant error and those caused by intentional misrepresentation. If TWC determines the overpayment resulted from fraud — knowingly providing false information, continuing to claim after returning to work, or misrepresenting job refusals — it adds a 15% penalty on top of the amount owed and can refer the case to law enforcement. Texas treats UI fraud as a criminal matter, and prosecutions do occur.
Frequently Asked Questions
- I received a TWC overpayment notice but I reported everything correctly. What happened?
- The most common reason for this is an employer appeal reversal. If your employer contested your claim after you were approved and they won, TWC is legally required to recover all benefits paid since the disputed start date — even though you did nothing wrong. You can appeal the overpayment if you believe the underlying appeal decision was incorrect. If the reversal was valid, the debt still stands regardless of your good-faith conduct. In non-fraud overpayment cases caused by TWC error or employer reversals, TWC may consider waiver requests in limited circumstances — contact TWC and ask specifically about waiver eligibility.
- Can TWC take money from my paycheck or bank account for an overpayment?
- Yes. TWC can garnish wages through a court judgment, intercept Texas state tax refunds administratively, and offset any future UI benefits. For large overpayments, TWC may refer the matter to the Texas Attorney General's Child Support Division (which handles general debt collection for state agencies). TWC typically starts with the less aggressive collection methods — intercepting future benefits and tax offsets — before pursuing wage garnishment. Setting up a repayment plan proactively is the best way to prevent escalation to these more serious collection actions.
- How long do I have to appeal a TWC overpayment determination?
- 14 calendar days from the mailing date on the overpayment notice — the same deadline as appealing a benefits denial. This deadline runs from the date on the letter, not the date you receive it. If you receive the notice days after the mailing date, you may have fewer than 14 days remaining. File the appeal immediately through UBS or by mailing a written statement to the address on the notice. The appeal must reach TWC within the 14-day window.
- TWC says I committed fraud. What does that mean for me in Texas?
- A fraud finding in Texas means TWC determined you intentionally provided false information to obtain benefits. Consequences include: a 15% penalty added to the overpayment balance, permanent bar from receiving the fraudulently obtained amount in future benefits (future benefits are intercepted until the full fraud debt is paid), possible referral to the TWC Office of Inspector General or Texas law enforcement for criminal prosecution, and a permanent fraud flag on your claim file that affects future claims. If you receive a fraud notice, appeal immediately and consider consulting a Texas employment or criminal attorney — this is more serious than a standard overpayment.
- I genuinely cannot afford to repay my TWC overpayment. Are there any options?
- Contact TWC at 512-936-3338 to request a repayment plan — most overpayments can be paid in monthly installments. TWC does not have a formal hardship waiver for standard non-fraud overpayments, but for non-fraud cases where the overpayment resulted from TWC error (not claimant error), there is a limited waiver process. Ask TWC specifically: "Was this overpayment caused by agency error?" and request information on waiver eligibility in writing. In cases of identity theft (someone else filed using your name), TWC's process is different — you are not responsible for the debt, but you must file a formal identity theft report with TWC and the Texas OIG.