Sandy funding ‘clawbacks’ deadline pushed back 1 year … for now

The U.S. government's year-end spending bill includes relief for Sandy-impacted homeowners in New Jersey who remain on the hook to repay some of the federal disaster relief funds they were awarded in the aftermath of the October 2012 storm.

The spending package, which is expected to get President Donald Trump's signature, pushes the deadline for recoupment from 2022 to 2023, as New Jersey's members of Congress work to completely scrap all payback efforts related to Sandy.

"A one-year delay in recoupment of these funds will help thousands of New Jersey families. My colleagues and I will continue fighting for full relief in the next Congress," said U.S. Rep. Frank Pallone, D-N.J. 6th District.

Pallone and fellow New Jersey congressmen Andy Kim and Bonnie Watson Coleman, along with U.S. Sen. Bob Menendez, D-N.J., introduced a bill in May that would end federal government "clawbacks" of funds related to Sandy and other disasters unless those funds were obtained fraudulently. Attempts to recoup payments have already been frozen at the state level.

Advocates for Sandy survivors say these clawbacks have blindsided homeowners who applied for loans and benefits based on the federal government's recommendations. Most people are being asked to repay portions of their funding due to "duplication of benefits."

"When you receive that first letter saying there's a problem, you go into immediate shock because you don't know what to do," said Jody Stewart, lead organizer on Sandy recovery for the grassroots group New Jersey Organizing Project.

Stewart had been asked to repay $20,000 in funds. The government had the wrong paperwork in her file for two years, she said, so no repayment was necessary. But she wonders how many other people are being asked to repay, or already have, as the result of a government error.

"We tell people, if they can wait, do not pay it back because we will fight for forgiveness," Stewart said.

As long as Sandy-relief programs exist, such as the state's RREM and LMI programs, lawmakers and advocates have a shot at fighting back against recoupment efforts, Stewart said. The proposed U.S. spending bill includes language that extends such programs through September 2023.

Contact reporter Dino Flammia at dino.flammia@townsquaremedia.com.