SPRINGFIELD (Illinois Watchdog) — As
Congress debates extending long-term unemployment benefits for some 1.3
million Americans, lost in the heated rhetoric are some very important
numbers for taxpayers.
The state and federal unemployment insurance system has helped a
lot of people in need, but it's also allowed some ineligible
recipients to fraudulently help themselves to the pocketbooks of
businesses and taxpayers. States recorded some $7.7 billion dollars
in improper unemployment insurance payments in 2013, according to
the U.S. Department of Labor.
FRAUD FILES: While the debate heats up on the merits of extended
unemployment benefits for more than a million Americans, fraud and
improper payments in the system haven't gotten much play.
Estimated improper payments run as high as 18.16 percent in
Nebraska. Louisiana posted the highest estimated fraud rate in the
nation last year, at more than 7 percent.
In Wisconsin:
Estimated improper payments totaled $92,644,556, through June 30.
The system had an estimated improper payment rate of 10.48 percent,
according to the Labor Department. The rate is the sum of the
overpayment rate and underpayment rate, subtracting overpayments
recovered, for the unemployment insurance program for the reporting
period. The data are required by the Improper Payments Information
Act.
The vast majority of improper payments involve work search issues —
the inability to validate that an individual has met the state's
work search requirements — and benefit year earnings, in which an
individual continues to claim and receive benefits after returning
to work.
The estimated unemployment insurance fraud rate during the period
was 2.1 percent.
The state determined nearly 5,600 claimants received fraudulent
federal Emergency Unemployment Compensation overpayments totaling
$10.5 million between Jan. 1, 2013 and Nov. 30, 2013. The
determinations are subject to potential appeal, according to John Dipko, spokesman for the state Department of Workforce Development.
EUC, which expired on Jan. 1, is a 100 percent federally funded
program. It provides benefits to individuals who have exhausted
regular state benefits. During the recent recession, Congress
expanded unemployment insurance payments, making benefits available
for up to 99 weeks.
The debate in Washington, D.C., is over the Emergency Unemployment
Compensation program. Some 1.3 million Americans, including 23,700
Wisconsinites, lost the long-term benefits with the turning of the
calendar year.
On Tuesday, the Democrat-controlled U.S. Senate passed the Emergency
Unemployment Compensation Extension Act on a mostly party-line vote
of 60-37. The legislation faces higher hurdles in the Republican-led
U.S. House of Representatives.
"Restoring economic assistance for Americans who have lost their
jobs and are trying to find new ones is the right thing to do, and
is good for the country's economy," said U.S. Sen. Tammy Baldwin,
D-Wis., a co-sponsor of the bill. "This bipartisan legislation will
provide a lifeline for Wisconsin families as they search for work in our
recovering economy."
Baldwin continued to criticize Wisconsin's economic performance
while insisting the rest of the nation was turning a corner,
arguably an argument against extending the benefits.
In Wisconsin, EUC payments in 2013, through November, totaled $325.3
million, according to Workforce Development. About 312,325 claimants
were paid out of all unemployment insurance programs, state and
federal, in 2013, totaling about $1.28 billion in all state and
federal benefit programs.
"Wisconsin acts aggressively to pursue UI fraud activity involving
both state and federal UI programs in our state," Dipko wrote in an
email to Wisconsin Reporter. "Through our vigilance and collection
methods, Wisconsin recovered $10.6 million in federal Emergency Unemployment
Compensation fraud overpayments last year."
Dipko said the agency has received additional tools to enhance its
"strong system" to curtail fraud. This month, the state will conduct
random unemployment insurance audits of claimant work-search
activities. Also in effect is a prohibition on collecting
unemployment benefits at the same time a claimant collects Social
Security Disability Insurance, Dipko said.
"While Congress has not approved a UI benefits extension at this
time, our employment and training system remains committed to
helping any Wisconsinites who are out of work — including those who
have been unemployed long-term — to reach the independence of
finding new employment and supporting themselves and their families," Dipko said.
State and federal lawmakers have expanded unemployment benefits
substantially in the decades following President Franklin D.
Roosevelt‘s New Deal and the Social Security Act of 1935.
What it hasn't been able to fix is the fraud and incompetence
inherent in the program.
A look at other Midwest states:
Illinois: 12.2 percent estimated improper unemployment insurance
payment rate, totaling an estimated $266.38 million. Estimated fraud
rate was 1.8 percent
The state and federal unemployment insurance system has helped a
lot of people in need, but it's also allowed some ineligible
recipients to fraudulently help themselves to the pocketbooks of
businesses and taxpayers. States recorded some $7.7 billion dollars
in improper unemployment insurance payments in 2013, according to
the U.S. Department of Labor.
