Roughly one in every four of the 2,500 residents who received unemployment benefits during the COVID-19 lockdowns were overpaid – collectively to the tune of $3.5 million.

The disclosure came in the House of Assembly on Friday from the Minister of Finance, Curtis Dickinson, who also admitted that 2,500 people were overpaid by an average of $1,300 because they failed to inform the Government when they returned to work while they continued to receive benefits.

Since then, just 300 people have repaid $500,000.

Responding to questions by Opposition MP Scott Pearman, the Minister said the Government will pursue the other 2,200 people to get the $3 million back.

He also stated that an undisclosed number of payments were made without being properly authorised by senior civil servants and that he will ask the House of Assembly to approve those payments retroactively.

The Minister’s comments came while tabling the Public Treasury (Administration and Payments) Amendment and Validation Act 2021 (the Act) in the Lower House.

The proposed amendments would enable government to recoup the funds by deducting them from future payments rather than going to court.

He also noted that the island’s lack of an unemployment insurance programme left people unemployed and struggling to “even take care of their basic needs” during the Shelter in Place restrictions.

Government was forced to create the unemployment benefit, or UEB scheme, from scratch and it was designed to pay people who were unemployed as a result of the COVID-19 crisis up to $500 a week, he added.

More than 10,000 people signed up for support.

“Because of the critical nature of ensuring that funding was provided to these vulnerable persons on a timely basis, there were instances in which there was insufficient time for UEB applications to be completed within the full review and approval process, prior to making payments (in accordance with the UEB Regulations),” said the Minister.

Thus, there were occasions where payments were expeditiously made without prior approval by the Director of the Department of Workforce Development and by the Permanent Secretary of Labour. There is therefore a need to validate any such payment made, under any of the UEB Regulations, to an eligible person without prior approval, as required by the relevant UEB Regulations.

“There were also limited instances, due to extenuating circumstances, where a regulation was not appropriately extended or replaced on a timely basis. Thus a few payments were made before the new or amended regulation was brought into force.”

In spite of the failures, the Minister said there were still checks and balances in place that left an effective audit trail in the system, which was used to review the payouts.

“It is the government’s intention to pursue, in a methodical and fair manner, the recovery of all outstanding overpaid amounts directly from respective recipients. 

“Once the provision is in place, the Government will be reaching out to individuals to recover funds that have not yet been returned,” he added.

“What we don’t want to do is get into the business of going to court recovering these amounts of money because in the first instance the cost of the court process is a burden for the individual and we have had good reactions from the individuals who have in most instances have acknowledged that they were overpaid.”

Admittedly, he said the overpayments and authorisation failures “may on the face of the matter seem somewhat alarming”.

But he said: “This crisis required the wellbeing of Bermuda residents to be given the highest priority.

“We made the necessary decisions to ensure that the most vulnerable in our society had funding for the basic necessities of life and to keep them and their families out of extreme poverty during a time of unprecedented hardship.

“It was a time when saving lives had to take precedence over rigid adherence to rules for the greater good.

“Notwithstanding the fact that we now need to take these steps, it is our strong belief that this was the right and humane thing to do for our people, given the devastating circumstances,” said Mr Dickinson.

The Minister also stated that $50 million was paid out in unemployment benefits in 2020, with another $17 million paid during the Stay at Home Order earlier this year.