By Karen Stokes
Unemployment compensation is a helpful benefit for people experiencing gaps in employment that need the money to provide for their household. Even though unemployment is presently the lowest since 2008, unfortunately some Wisconsinites that are ineligible for unemployment benefits are fraudulently helping themselves to these funds and in doing so are hurting residents, taxpayers and businesses.
Clifton Brooks (not his real name), who worked for years, lost his job due to downsizing, but recently went back to work and believes unemployment was important for his family. “It helped a lot,” said Brooks. “I was able to stay afloat while in between jobs. I’ve paid into the system.”
According to a recent Legislative Audit Bureau report, Wisconsin has paid approximately $167 million in fraudulent unemployment compensation overpayments between the years of 2012 and 2014.
There were instances where individuals made unintentional mistakes in applying for benefits. Unintentional errors accounted for 84.7 percent of total overpayments or nearly 557,000 claims.
There were other instances where people intentionally created fraudulent unemployment claims whether being ineligible for benefits or giving false information to receive an increase in payments. These acts of fraud made up 64,700 claims totaling $86 million.
An investigation into unemployment fraud found that Wisconsin inmates make up a portion of the intentional overpayments.
Between July 2013 and June 2014, the Department of Workforce Development (DWD) found 371 cases of overpayments to incarcerated individuals totaling nearly $425,506. That was down from June 2013 when the number amounted to 505 cases.
According to the DWD, anyone incarcerated for longer than 48 hours in any week is deemed unavailable for work and is ineligible for benefits, unless the claimant is granted work release privileges and is allowed to leave and look for work and accept work when it is offered.
The department utilizes a cross match program to detect and prevent improper unemployment benefits. The department has a data sharing agreement with the Social Security Administration (SSA) that allows the department to cross match benefits data against an incarceration data base maintained by the SSA.
Since 2010, the Unemployment Insurance Division agencies have recovered $767,519 in illegal payments to inmates.
If an individual files a legitimate claim in the future, benefits can be denied, reduced or offset by the previously unwarranted amount.
The agency uses different methods of collecting overpayments including direct billing, levies, warrants and tax intercepts.
There are basically five consequences of committing unemployment fraud and they are repayment of debt, failure to collect unemployment in the future, criminal charges, a criminal record and possibly not being able to secure employment at certain companies due to your fraud conviction.
What is interesting is that as reported in a Fox 6 investigation, the state of Wisconsin seeks no criminal charges in 99.8 percent of fraud cases. Of 44,488 people who cheated from July 2011 through July 2014, the state referred only 93 of them for criminal prosecution.
The remaining 44,395 people who made fraudulent claims intentionally were not charged.
In 2014, the Wisconsin Unemployment Insurance Program was awarded a $1.8 million in Federal grant funding. The funding supports initiatives to increase unemployment insurance integrity and decrease fraud and abuse in the system.
“We are pleased that the federal government recognized and is supporting Wisconsin’s efforts to build upon its already strong UI program,” said Reggie Newson, DWD secretary.
The Legislative Audit Bureau reported the state government received 201 tips on fraud or abuse over the past two years.
To report Unemployment Fraud in Wisconsin call 1-800-909-9472