A MAN has waited five years and is still counting after he and his family were left penniless when his unemployment benefits were frozen.
Paul Kreps and his family from Michigan were left with nothing for years after he was denied $25,000 worth of unemployment payments during the COVID pandemic.
COVID restrictions forced Paul Kreps to close his business but he is still waiting for his unemployment benefits after they were frozen (stock)[/caption]
A lawsuit was filed in August 2022 claiming Kreps and others were left in ‘financially dire situations’ as a result of the Michigan Unemployment Insurance Agency (stock)[/caption]
He was one of four people named in a class-action lawsuit filed against the Michigan Unemployment Insurance Agency.
Kreps, 31, was approved for benefits for the agency in April 2020 when COVID restrictions forced him to close down his Monroe pest control business.
The young father was eligible for $362 per week from the state plus aid from the Pandemic Unemployment Assistance program.
By 2022, he still hadn’t received any of the money with his online unemployment system account showed that all 44 weekly payments had a “Stop Payment Indicator” on them to freeze payments.
“It made me upset, because here we are, we’re losing everything we have,” Kreps, who had never been unemployed before, told Michigan Live in 2022.
“They say they are sending me money, but I can’t get it. My kids are hungry, we have no food, we are literally starving because we have no income.”
At the time, Kreps paid as little as possible on utility bills and his parents were forced to take out a second mortgage to prevent the family of four from becoming homeless.
“We lost pretty much everything we had,” Kreps said of his wife of 11 years and his two children.
“I couldn’t get jobs even though I tried, but nobody was hiring because it was a pandemic.
“We literally lost everything. We were lucky enough to have my parents who took out that second mortgage to help us, but if it wasn’t for them, we would have been homeless.”
Kreps and four others decided to file a lawsuit against the agency with David Blanchard of Ann Arbor-based Blanchard & Walker.
The suit claimed that thousands of workers during the pandemic had their payments frozen by the agency and had no way to appeal the action, denying them due process.
These were the “people left behind in this pandemic,” Blanchard said in 2022 with many eligible claimants having to wait for months and others having “never been paid at all.”
According to the suit, the five plaintiffs had their “well-established” right to unemployment benefits violated leaving them “without a lifeline” and in “financially dire situations.”
The state saw unemployment rates hit almost 23% in April 2020.
A policy introduced in October 2020 got the agency to “arbitrarily freeze benefit payments,” with no explanation, the lawsuit alleged.
“Why are you doing this to people? Poor, out-of-work people in Michigan are getting treated like this,” Blanchard said at the time.
Now, five years later, Kreps who got a job as a truck driver in June 2021 and other plaintiffs in the lawsuit are still awaiting payment.
In July 2023, the federal court ruled that those who brought the lawsuit “plausibly alleged a procedural due process claim by pleading that their UI benefits were ‘terminated’ before they received ‘an opportunity to be head.’”
According to the Blanchard & Walker website, litigation for the Kreps et al. lawsuit is still “in progress.”
Kreps vowed back in 2022 that when the agency eventually pays the $25,000 he is owed, it will go to his parents.
SETTLEMENT
Meanwhile, MUA has agreed to pay $55 million to settle another unemployment benefit lawsuit related to the pandemic and has vowed to make changes to how it processes claims.
This lawsuit also led by Blanchard & Walker involved claimants who were told they owed the state money and had their wages taken or tax returns seized.
A final approval hearing is scheduled for March 2025.
“The settlement agreement provides for groundbreaking and unprecedented reforms and other nonmonetary relief,” Blanchard told the Detroit Free Press in April.
“This settlement agreement lets us focus staff and resources on customer service and reforms we are making at the Unemployment Insurance Agency that benefit Michigan workers and employers alike,” Julia Dale, director of Michigan’s UIA, told the outlet in an email.
“Throughout this legal process, the UIA worked cooperatively with the court to establish new rules and procedures so Michigan residents won’t find themselves in a similar situation in the future.”
