Crapo, Wyden Release Framework of Unemployment Insurance Program Improvements
Bipartisan framework would fight fraud, improve administration of state UI systems, strengthen program integrity
Washington, D.C.--U.S. Senate Finance Committee Ranking Member Mike Crapo (R-Idaho) and Chair Ron Wyden (D-Oregon) released a bipartisan framework of legislation that would make key improvements to the nation’s unemployment insurance system. Those improvements would focus on program administration and integrity to combat fraud and improve access to benefits for eligible workers.
“This bipartisan framework takes crucial steps toward providing states’ unemployment systems with much-needed tools to recoup and prevent fraudulent claims,” said Crapo. “As we saw throughout the COVID-19 pandemic, fraudulent actors are a serious threat and prevent legitimate claimants from receiving timely payments. By building a stronger and more accessible UI system, we can ensure taxpayers are protected and those who need assistance receive it.”
“During the heat of the pandemic in 2020, state unemployment insurance systems routinely struggled to keep up as millions of Americans were laid off or furloughed,” said Wyden. “This bipartisan framework would begin to make the UI system more resilient so that it’s up to the challenge during the next recession. The key is understanding that better serving workers in a crisis and preventing fraud are not mutually exclusive. This framework would help states detect and prevent fraud while also ensuring that eligible workers can more easily apply for benefits and quickly receive what they are owed.”
View the framework summary here or below:
Unemployment Insurance Program Integrity and Improved Administration Framework
The COVID-19 pandemic revealed that the Unemployment Insurance (UI) program was both difficult for workers to access and vulnerable to fraud. The following bipartisan framework, developed by Senate Finance Committee Chairman Ron Wyden and Ranking Member Mike Crapo, would prevent future UI fraud and help ensure those who defrauded the system during the pandemic are brought to justice. It would also provide relief for claimants who were overpaid and cannot afford repayment or face other hardships, and take steps to make UI systems more accessible to eligible workers.
Unemployment Insurance Fraud and Overpayment Recovery
- Extends the federal statute of limitations for pandemic unemployment insurance fraud to 10 years (from 5 years under current law).
- Allows states to waive overpayments of pandemic unemployment insurance that have not been recovered as of date of enactment in non-fraud cases where repayment would be contrary to equity and good conscience. States are required to waive these non-fraud overpayments if no overpayment is established by December 31, 2025.
- Allows states to retain 5 percent of recovered overpayments of unemployment compensation and 5 percent of employer unemployment taxes collected as part of a state investigation. States may retain up to 25 percent of overpayment recoveries of fraudulent pandemic unemployment overpayments. Allows states to invest retained funds in unemployment insurance administration.
Unemployment Insurance Program Integrity
- Requires states to crossmatch unemployment compensation claims against the National Directory of New Hires (NDNH) to prevent claimants from collecting UI if they are working.
- Requires states to utilize systems such as the State Information Data Exchange (SIDES) to allow electronic transmission of accurate claim information between employers and states.
- Requires states to use crossmatching systems such as the Integrity Data Hub (IDH) to identify potentially fraudulent unemployment claims.
- Requires states to crossmatch unemployment compensation claims against the Social Security Administration’s prisoner database to prevent fraud.
- Requires the Secretary of Labor to issue regulations to ensure proper implementation of crossmatching requirements.
Unemployment Insurance Administration and Technology
- Implements new access and technology requirements for online claim filing systems and in-person alternatives.
- Requires states to provide guidance to employers to facilitate their eligible workers’ access to benefits.
- Provides for oversight of federal investments into the administration of UI programs.
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