Massachusetts Agrees to Repay $2.1 Billion in Federal COVID-19 Funds Misused for Jobless Claims

The Healey administration negotiated a reduced repayment plan spread over 10 years after uncovering the misuse of federal relief funds under the prior governor.

• Massachusetts improperly used $2.5 billion in federal pandemic relief funds to cover unemployment benefits, an error discovered in 2023 by Governor Maura Healey's administration.
• A settlement with the U.S. Department of Labor reduced the state's repayment amount to $2.1 billion, avoiding over $1 billion in additional interest and penalties.
• The state will repay the amount over 10 years, with principal payments coming from the Unemployment Insurance Trust Fund and interest payments from the general fund.
• Massachusetts employers will not see tax rate increases for unemployment insurance before 2026, though the trust fund is already projected to face significant debt by 2028.
• Governor Healey has directed a review of the state's unemployment insurance system, aiming for reforms to address solvency and reduce burdens on businesses.

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