LOUISVILLE, Ky. (WDRB) — State audits found major problems with Kentucky's unemployment system during the COVID-19 pandemic, and those issues are now affecting thousands of people being told to repay benefits years later.
It's tax season, and Ashley Braden is busy preparing returns for her clients. At the same time, she's fighting with the state after she received letters saying she owes unemployment money from the pandemic.
"They came out with a thing that you didn't have to have a W-2 job to get unemployment," Braden said.
She received the benefits years ago but is now being told she must pay them back.
"This happened in 2021," she said. "This is 2026. Right now, I owe $6,488."
Since a previous WDRB story aired on the issue, Braden was one of many people who reached looking for answers. WDRB Investigates found audits from 2021 and 2022 which outlined problems with the state's unemployment system. These issues may explain why so many people are receiving repayment notices.
Republican Kentucky Auditor Allison Ball said the issue is resurfacing as the state attempts to recover pandemic-era overpayments.
"This issue has raised its head again because we're hearing people who had filed unemployment back in the day are now being told they owe lots of money back," Ball said.
The Kentucky Auditor's Office reviews the unemployment office each year. Older audits identified several issues with the system and made recommendations for improvements. Ball said the system automatically approved many claims during the pandemic.
"Over $600 million distributed were the result of auto pay," she said. "Not all of them were fraudulent."
According to Ball, the system allowed people to receive unemployment benefits without thorough eligibility checks.
"People could sign up for UI and were granted UI without a lot of analysis whether or not they were eligible," she said. "The big issue — they didn't have to put what kind of wages they were receiving."
Ball also pointed to outdated technology used by the state.
"They actually were using outdated software from the 1970's," she said. "They purchased new software and they didn't use it. There were things that could have been done, should have been done, because now we're paying the price for it."
The state sent more than 38,000 letters to Kentuckians, including Braden, notifying them of pandemic unemployment overpayments and seeking repayment.
Ball identified the Office of Unemployment Insurance as responsible for failing to address the problems.
"The Office of Unemployment absolutely missed the boat on that one," she said.
Neither Gov. Andy Beshear nor the Office of Unemployment Insurance responded to a request for comment for this story. While the state informed many people they don't have to repay the money because of a "departmental error," Braden was told she still has to pay.
She started paying $75 a month back to the state.
"They sent me a letter saying they're going to take my tax refund and liens and I thought 'OK, I must really owe this,'" Braden said, adding she also has documents showing the state took her tax refund.
Braden is still trying to get answers from the state but can't reach anyone.
"I don't know how some people are getting it waived," she said. "No one can tell me."
It remains unclear how the state determines who must repay the money and whose overpayments are forgiven.
"I want them to be tell me how they arrived at this decision so I have some recourse of why I don't owe the money," Braden said.
The state is currently in the middle of a $55.5 million contract with Deloitte Consulting to replace the old unemployment system — a project expected to take a couple more years to complete.
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