Benewah News
Claimants face stiffer penalties for unemployment fraud
Apr 12, 2005, 11:41
The Idaho Department of Commerce and Labor is cracking down on unemployment insurance fraud with a more aggressive education and enforcement campaign.
New legislation approved this session and signed into law by Governor Dirk Kempthorne, imposes stricter penalties for people caught defrauding the state’s unemployment insurance system.
The new law, which takes effect July 1, requires first time offenders to repay the overpayment they’ve received plus a 25 percent penalty. Second time offenders will receive a 50 percent penalty and third time offenders will see a 100 percent penalty.
The new law also permits the department to assess interest on all overpayments. In addition to financial penalties, individuals who commit fraud will have to wait a minimum of 52 weeks and repay the entire amount before they are eligible to receive any future unemployment insurance benefits.
Before these changes, the penalty for fraud was 52-weeks of benefits ineligibility.
“My advice to those tempted to cheat the system is – don’t do it,” said Don Arnold, Tax and Benefit Control Bureau Chief. “The stakes are higher and your chances of getting caught are greater.”
Arnold said the department’s new automated computer system will quickly cross-reference and check information they receive from claimants. The department has also beefed up its team of investigators to track down potential fraud.
For serious offenders the state is actively pursuing criminal prosecution – more than a dozen criminal prosecution cases are currently underway.
Over the last two years, the amount of unemployment insurance fraud detected by department investigators increased by more than 33 percent.
In 2004, the state discovered $6 million in unemployment insurance overpayments – $4.07 million of that amount was determined to be fraud. Investigators discovered that about 1,700 people had received an average of nearly $2,400 in unemployment insurance overpayments that they weren’t entitled to.
The $4.07 million in overpayments was about 2.6 percent of the more than $150 million in unemployment insurance payments the state paid during 2004.
In 2003 the department detected $3 million in fraudulent claims. The department recovered $2.7 million in overpayments in 2004, but Arnold said recovery can be difficult.
“The financial condition of most individuals who commit UI fraud makes it difficult to recover the money,” Arnold said. “Prevention and education plays an important role in helping claimants understand the perils of defrauding the unemployment insurance system.”
Other efforts underway include flyers and posters that will be displayed at the state’s 24 local Commerce & Labor offices.
The most common types of fraud are:
* Failing to look for work while receiving benefits.
* Not accurately reporting weekly earnings while drawing benefits.
* Continuing to receive benefits after returning to work.
* Not being able and available for work while receiving benefits.
* Stealing someone’s identity to receive benefits.
* Continuing to collect benefits while on vacation.
* Helping someone file a fraudulent claim.
If you know of someone who is defrauding the system, there’s a toll-free number 1-800-672-5627 – to call and report fraud. If the caller chooses not to provide his or her identity, the call may be made anonymously. Fraud can also be reported on the Commerce & Labor website by clicking on the unemployment insurance link.
Arnold said the state is committed to reducing unemployment insurance fraud and maintaining the integrity of the program.
“Idaho’s unemployment insurance program provides an important safety net that offers temporary income to unemployed Idahoans as they look for new work,” he said. “That extra income also provides a much needed boost to the economies of Idaho communities impacted by layoffs.”
The new fraud penalties and prevention tools are part of a comprehensive package of legislation designed to replenish the state’s unemployment insurance trust fund, which in the last three years has paid out significantly more benefits than it has received in taxes.