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Prison Inmates Collecting Millions in Unemployment Cash

In many states, the inmates themselves are expected to report their new residence in prison, which would stop the payments.

by
Rodrigo Sermeño

Bio

September 21, 2013 - 12:33 am
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According to the U.S. Department of Labor, the improper payment rate in fiscal year 2012 for unemployment insurance benefits was 11.4 percent, or $10.3 billion out of $90.2 billion.

The federal-state UI program, created in part by the Social Security Act of 1935, is administered under state law based on federal requirements. The program provides temporary, partial compensation for lost earnings of eligible individuals who become unemployed.

Applicants of UI benefits must have earned at least a certain amount in wages or have worked a certain number of weeks to be eligible. In addition, these individuals must be available for and able to work, and actively search for work.

Most of the overpaid funds end up in the hands of three types of people: those who continue to file claims even though they have returned to work, those who are not actively searching for a job, those who were fired or quit voluntarily.

The UI overpayment typically results from an administrative error.

“Most of the overpayments in the UI system are for reasons of non-fault. Either because there was agency error, employer error, or claimant error,” said Sharon Dietrich, a managing attorney for Philadelphia-based Community Legal Services.

Dietrich said that fewer than one out of four overpayments were found to be fraudulent. She said unemployment compensation fraud cannot be tolerated, but urged that it be examined in the context of overpayments of benefits.

“Sometimes, there is a tendency to conflate fraud with overpayments, the latter of which are all circumstances in which people received UI benefits for which they were later determined to be ineligible. In the vast majority of cases, these overpayments are ‘non-fraud,’ meaning that the worker was not intentionally trying to defraud the system,” Dietrich said.

She said overpayments cover all situations where people receive unemployment compensation benefits for which they are later determined to be ineligible.

Dietrich also noted that overpayment of unemployment compensation benefits is on the rise because of inadequate federal funding for state programs, which leaves administrators and staffers overburdened.

Valerie Melvin, an official at the Government Accountability Office, said that state agencies rely on outdated information technology systems to collect and process the tax revenue that funds the UI program, determine eligibility, and administer benefits.

“The majority of the states’ existing systems for UI operations were developed in the 1970s and 80s. Although some agencies have performed upgrades throughout the years, many systems are reported to be outdated, costly, and difficult to support, and incapable of efficiently handling workload demands,” Melvin said.

Dietrich urged the panel to put an emphasis on improving criminal justice system databases so the information used to identify incarcerated persons is up to date and reliable. Nevertheless, she said there are more significant ways to avoid or reduce UI overpayments.

“While I understand the outrage around people who are incarcerated collecting benefits, clearly this is a small subset of claims that are found to be fraudulent, much less overall overpayment numbers,” she said.

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Rodrigo is a freelance writer living in Washington, D.C.

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Top Rated Comments   
There is no incentive for the inmate to report his incarceration. After all what are you going to do to him? Throw him in jail?

This is what happens when progressives start handing out money - they couldn't care less where it goes and who gets it - or if they are actually eligible to receive it. They just feel good about handing out money - and it sticks it to 'the man' too!
49 weeks ago
49 weeks ago Link To Comment
All Comments   (15)
All Comments   (15)
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What does the author want? Every business needs seed money or investment capital. The guards will not smuggle in all that heroin, at considerable risk, for free.
49 weeks ago
49 weeks ago Link To Comment
my classmate's step-sister makes $89/hr on the computer. She has been fired for seven months but last month her payment was $15654 just working on the computer for a few hours. why not check here>>>>>>
w­w­w.J­A­M­3­0.C­o­m
49 weeks ago
49 weeks ago Link To Comment
I would be willing to pay them to stay in jail for the rest of their lives...
49 weeks ago
49 weeks ago Link To Comment
going to jail should automatically trigger the change of address, but that is government doing what government does, inefficiency and incompetency.

Bet discover card, master card, visa could have this problem resovled in 20 minutes if asked.
49 weeks ago
49 weeks ago Link To Comment
Hmm. maybe if the same state would automatically suspend child support obligations for men as well, I'd have a smidgen of compassion about how the state was 'cheated' out of money by expecting incarcerated people to somehow manage to do paperwork, hire and fund lawyers, see doctors, pay bills and manage other concerns that the rest of us are swamped with.

You locked them up, you fix it, and until you're able to suspend the incarcerateds' obligations as well, I don't want to hear any whining about it.
49 weeks ago
49 weeks ago Link To Comment
"“While I understand the outrage around people who are incarcerated collecting benefits, clearly this is a small subset of claims that are found to be fraudulent, much less overall overpayment numbers,” she said"

Yes but it is like a house energy audit. You find a leak and you plug it.

As some point you have to start plug holes and start bailing.

Instead she stands their all indignant and smarmy saying it is such a small problem move on.
49 weeks ago
49 weeks ago Link To Comment
Sharon Dietrich is part of the problem. She fixes some problems but she creates others and I daresay larger ones with the way she digs in her heels.
49 weeks ago
49 weeks ago Link To Comment
"The majority of the states’ existing systems for UI operations were developed in the 1970s and 80s"

Blah, blah blah.

Sometimes it is the fault of both parties. I have seen it. they will scrap programs taking a few to several years to develop because their predecessor initiated or approved it. Therefore they cannot take 100% credit for it. they have to put their stamp on things. So all those programming hours & testing go out the window. it does not matter if a Democrat succeeds a Democrat or a Republican succeeds a Republican.

F_____g Cr_p!
49 weeks ago
49 weeks ago Link To Comment
All you have to do is take a table from one database ( a list of inmates) and compare it a table from another database (a list of jobless benefits claimants) and strip the former form the latter.

Any competent programmer can do this. The only reason that they do not is because they do not program anything unless a state lawmaker passes a law.

So it is a lack of will, foresight pr priorities not a lack of technical know how.

A programmer with an associates degree could do this and often do.
49 weeks ago
49 weeks ago Link To Comment
Boy but look at the Pennsylvania program. Very impressive! That needs to be taken nationwide. Great story, brings a tear to my eye.

Thank you Rodrigo. You made my day!
49 weeks ago
49 weeks ago Link To Comment
There is no incentive for the inmate to report his incarceration. After all what are you going to do to him? Throw him in jail?

This is what happens when progressives start handing out money - they couldn't care less where it goes and who gets it - or if they are actually eligible to receive it. They just feel good about handing out money - and it sticks it to 'the man' too!
49 weeks ago
49 weeks ago Link To Comment
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