Beginning in the upcoming year, Pennsylvania will implement a new policy that will enable the direct return of unclaimed money to its rightful owners. This change removes the previous requirement for individuals to file a claim with the state Treasury in order to access their funds.
In a notable triumph for state Treasurer Stacy Garrity, a Republican who introduced the bill last year, the change represents a major win in this election year. Garrity will be running against Democrat Erin McClelland in the upcoming November elections.
“I am thrilled to return this money to the rightful owners, the people of Pennsylvania,” stated Garrity upon the enactment of the legislation.
Pennsylvania has an astonishing $4.5 billion worth of unclaimed property, consisting of funds from dormant bank accounts, uncashed checks, and unused gift cards. According to the law, these funds must be surrendered to the state. Despite this, the original owners of the property often remain unaware that they have the right to file a claim with the state Treasury to retrieve their money.
The new law tackles this issue by empowering the agency to proactively return unclaimed funds to individuals, eliminating the need for them to file claims. However, this provision is applicable only for amounts under $500 owed to a single person. For larger amounts, property owed to multiple individuals, or owed to businesses and nonprofits, the traditional claim process will still be required.
According to a legislative estimate, the state Treasury anticipates that over 70,000 individuals will be eligible for refunds in 2025. However, the total amount of money refunded is expected to be relatively small, with $600,000 projected for the first fiscal year. It is worth noting that Pennsylvania typically returns at least $100 million annually.
In January, when the law becomes effective, Pennsylvania Treasury officials will commence the process of sending letters to validate the current addresses of property owners. By the end of February, the initial wave of checks will be distributed, as confirmed by a spokesperson. The agency intends to continue sending out checks every quarter.
Since assuming office in 2021, Garrity has prioritized unclaimed property, leading to a significant enhancement to expedite claims that was initiated by her predecessor. Furthermore, she has instructed the agency to facilitate direct deposit payments for certain claims, rather than solely relying on paper checks.
Ron Lizzi, an advocate who believes that states should return more unclaimed property, expressed his thoughts in an email to Spotlight PA. He described the bill as a “small step forward” but criticized its timing, stating that it was “years late.” Lizzi also highlighted that the $500 threshold for returns without claims was “way too low” compared to other states, which have set their thresholds at $5,000 or even $10,000.
In December, House Democrats voted to decrease the threshold to $100 from the original $5,000 limit that Garrity initially proposed. Their rationale was that the initiative should begin with a smaller amount and demonstrate its effectiveness before expanding further. This decision was made following criticism from state Rep. Ryan Bizzarro of Erie, who is running in the Democratic primary for state treasurer, regarding Garrity’s management of unclaimed property.
The bill is “significant legislation that will provide financial relief to the people of Pennsylvania,” according to Bizzarro, who lost to McClelland in a surprising primary election.
In a statement to Spotlight PA, Garrity mentioned that there is no restriction on increasing the limit in the future.
