Yes, the UC System can be used to make payments towards an overpayment of UC benefits. An overpayment is caused when TWC pays unemployment benefits that you were not eligible to receive.This chapter deals with state law provisions for identifying, establishing, and collecting Unemployment. The Continued Assistance Act also permitted a state to waive repayment of a PUA overpayment under certain circumstances and provided for the. Overpayment: When a state agency finds it has paid a worker UI benefits the worker was not entitled to. Although there are broad requirements under federal law regarding UI benefits and financing, the specifics are set out under each state's laws.