Thousands of New Mexicans who were told to repay unemployment benefits they received during the COVID-19 pandemic may now be eligible to have that debt forgiven — but many don’t know it, and the state estimates around 30,000 people still haven’t applied.
The Short Answer
New Mexico’s Department of Workforce Solutions is required to forgive many pandemic-era unemployment overpayments under a settlement in Duran v. New Mexico Department of Workforce Solutions. Eligible New Mexicans can apply by phone, online through their unemployment account, or in person at a Department of Workforce Solutions office, and the application only requires answering two yes/no questions — no documentation needed.
A Quick Recap: Why Pandemic Unemployment Got So Complicated
During the pandemic, the federal government stood up several brand-new unemployment programs almost overnight, and states had to administer them at a pace they’d never handled before. That combination — new rules, new systems, huge claim volumes — is why so many states, New Mexico included, ended up sending money to people and then later determining, sometimes incorrectly, that the payment had been an overpayment.
How the Overpayments Happened
According to Stephanie Welch, workers’ rights director at the New Mexico Center on Law and Poverty, the flood of new federal programs led to widespread administrative errors in how benefits were issued. New Mexico’s Department of Workforce Solutions later determined that many of the benefits it had paid out were overpayments and demanded repayment — even though, in many cases, the underlying error was the state’s, not the recipient’s.
For people who had already spent that money on rent, food, and other essentials during an economic crisis, being asked to pay it back years later created serious financial strain. As Welch put it, that money “was much needed for so many New Mexicans,” who used it immediately to cover basic costs while waiting to get back to work.
The Duran v. New Mexico Department of Workforce Solutions Settlement
The New Mexico Center on Law and Poverty filed the Duran lawsuit because federal law allows states to waive many pandemic-era overpayments, and advocates argued New Mexico wasn’t applying that relief broadly enough. Before the settlement, according to Welch, “a lot of people didn’t know about the program… a lot of people were being denied forgiveness… a lot of people were receiving only partial forgiveness,” and some were entitled to refunds of money they’d already repaid but never got them.
The case settled, and the Department of Workforce Solutions sent notices to an estimated 60,000 people it believed could be affected. Welch’s organization now estimates that around 30,000 of those people still haven’t received debt forgiveness or a refund and need to actively apply.
Why So Many Eligible People Haven’t Applied
Welch says a large share of eligible New Mexicans likely never received notice of their eligibility, for reasons that include:
- A change of mailing address since the pandemic
- No longer using the email address tied to their old unemployment account
- Simply not having logged into their unemployment account in years
Because so much time has passed, the recommendation from advocates is straightforward: anyone who received unemployment benefits during COVID-19 should check with the Department of Workforce Solutions to see if they have an outstanding overpayment, even without a specific notice prompting them to do so.
How Much Is at Stake
The amounts involved vary widely. Welch said some people owe as little as roughly $2,000, while she has personally spoken with individuals who owed as much as $30,000. Any debt tied to a pandemic-era overpayment may be eligible for waiver under the settlement, regardless of the amount.
Overpayment Forgiveness Isn’t Unique to New Mexico
New Mexico isn’t the only state grappling with this issue. Federal guidance issued during and after the pandemic gave states latitude to waive unemployment overpayments that occurred without the claimant’s fault, and many states have run their own waiver or forgiveness processes for pandemic-era unemployment debt. The specific rules, application process, and deadlines vary significantly by state, which is why New Mexicans should follow the process described above rather than assume rules from another state apply to them — and why residents of other states with a similar overpayment notice should check with their own state’s unemployment agency about whether a comparable waiver program exists.
How to Apply for Debt Forgiveness
According to Welch, anyone who received pandemic-era unemployment benefits can check their status and apply for a waiver of their overpayment in any of three ways:
- Call the Department of Workforce Solutions directly.
- Log in to an existing online unemployment benefits account.
- Visit in person at any Department of Workforce Solutions office in New Mexico.
Welch emphasized that the process itself is not onerous: applicants answer two yes-or-no questions and are not required to submit documentation or proof to support their answers. People who feel intimidated by the process because they no longer have records from the pandemic years shouldn’t let that stop them from applying — proof isn’t required.
Where to Get Help
People who run into difficulty or have questions about the waiver process can contact the New Mexico Center on Law and Poverty, which has additional information available on its website at nmpovertylaw.org/ui. New Mexicans can also reach the Department of Workforce Solutions directly to check their account status and confirm whether they have an outstanding overpayment.
Frequently Asked Questions
Is this forgiveness program only for New Mexico residents?
Yes. This specific waiver process comes out of a New Mexico court settlement and applies to overpayments assessed by New Mexico’s Department of Workforce Solutions. Other states have their own separate rules and processes for pandemic-era unemployment overpayments, so check with your own state’s unemployment agency if you live elsewhere.
Do I need proof that the overpayment wasn’t my fault?
No. According to advocates involved in the settlement, the application only requires answering two yes/no questions, with no supporting documentation required.
What if I already repaid the money?
Some people who already repaid overpayments that should have been waived may be eligible for a refund of what they paid, not just forgiveness of any remaining debt. Check with the Department of Workforce Solutions or the New Mexico Center on Law and Poverty about your specific situation.
What if I never received a notice about the settlement?
The state estimates a large share of eligible people never got notice due to outdated contact information. Don’t wait for a notice — proactively contact the Department of Workforce Solutions if you received unemployment benefits during the pandemic and were later asked to repay some or all of it.
Is there a deadline to apply?
The source interview didn’t specify a hard cutoff date for applications. Given that this depends on a court settlement, anyone who thinks they may be eligible should apply as soon as possible rather than risk missing a future deadline.