KRS 341.415: Recovery and recoupment limitations.

(1) (a) Any person who has received any sum as benefits under this chapter or

any other state's unemployment insurance statutes or any United States

Department of Labor unemployment insurance benefit program, providing

the secretary has signed a reciprocal agreement with such other state or

the United States Department of Labor as provided in KRS 341.145, while

any condition for the receipt of such benefits was not fulfilled in his case,

or while he was disqualified from receiving benefits, or if he has received

benefits in weeks for which he later receives a back pay award, shall, in

the discretion of the secretary, either have such sum deducted from any

future benefits payable to him under this chapter or repay the Office of

Unemployment Insurance for the fund a sum equal to the amount so

received by him.

(b) If after due notice, the recipient of such sum fails to remit or arrange for

remittance of the sum, the sum may be collected in the manner provided

in KRS 341.300(2) for collection of past-due contributions and any sums

so collected shall be credited to the pooled account or the appropriate

reimbursing employer account.

(c) The appropriate reimbursing employer account shall not receive credit for

sums collected under this subsection or KRS 341.550(2)(b) if a

determination has been made that an improper benefit payment

established after October 21, 2013, was due to the reimbursing employer,

or an agent of the employer, in accordance with the provisions of KRS

341.530(4)(a) and (b). The sums collected shall be credited to the pooled

account.

(d) If any benefit was paid as a result of office error as defined by

administrative regulation, there shall be no recoupment or recovery of an

improperly paid benefit, except by deduction from any future benefits

payable to him under this chapter. For purposes of this section,

overpayments as a result of a reversal of entitlement to benefits in the

appeal or review process shall not be construed to be the result of office

error.

(2) At or after the commencement of an action under subsection (1) of this section,

attachment may be had against property of the recipient of improperly paid

benefits in the manner provided in KRS 341.300(3).

(3) A lien on a parity with state, county, and municipal ad valorem tax liens, is

hereby created in favor of the office upon all property of any recipient of

improperly paid benefits. This lien shall be for a sum equal to the amount of the

overpayment finally determined and shall continue until the amount of the

overpayment plus any subsequent assessment of additional improperly paid

benefits, penalty, interest, and fees are fully paid. The lien shall commence

from such time as the recipient has exhausted or abandoned the appeal

procedure set forth in this chapter and the amount of the overpayment is finally

fixed. A notice of lien may be filed in the same manner as that provided for in

KRS 341.310.

(4) Any amount paid to a person as benefits, which he has been found liable to

repay or to have deducted from future benefits under subsections (1), (2), and

(3) of this section, which has neither been repaid nor so deducted within a

period of five (5) years following the last day of the benefit year within which it

was paid, may be deemed to be uncollectible and shall be permanently

charged to the pooled account, except that if such payment was made by

reason of fraudulent representations, no future benefits shall be paid such

person within a period of ten (10) years of the last day of the benefit year within

which such payments were made at which time these amounts may be

declared uncollectible. Nothing in this subsection shall be deemed to affect

collection of improperly paid benefits pursuant to a judgment or other legal

remedy.

(5) In the event benefits have been paid as a result of a false statement,

misrepresentation, or concealment of material information by a recipient of

benefits and have not been repaid by the recipient within one (1) calendar year

from the date of the first notice, interest at the rate of one and five-tenths

percent (1.5%) per month or any part thereof, shall be imposed on and added

to the unpaid balance each successive month, providing due notice has been

given to the recipient. Such interest shall be paid into the unemployment

compensation administration account.

(6) A recipient of benefits paid as a result of a false statement, misrepresentation,

or concealment of material information by the recipient shall be assessed a

fifteen percent (15%) penalty of the amount of improperly paid benefits. The

penalty under this subsection shall be collected in the same manner as

improperly paid benefits in this section and paid into the unemployment trust

fund.

(7) The deduction from future benefits specified in subsection (1) of this section

shall be limited to twenty-five percent (25%) of the benefit amount otherwise

payable under this chapter unless the overpayment resulted from a backpay

award, false statement, misrepresentation, or concealment of material

information by a recipient of benefits. In these instances, the rate of deduction

shall be one hundred percent (100%). The rate of deduction from benefits

payable by another state or the United States of America shall be determined

by the applicable state or federal statute.