Kansas unemployment payment fraud, recoveries on the rise

NEW LEGISLATION: A bill passed last year is helping the state recover more funds because of administrative lien and levy powers.

By Travis Perry │ Kansas Watchdog

OSAWATOMIE, Kan. — Good news, Kansans! Because of legislative changes passed last year, the state Department of Labor says it has managed to reclaim $17.1 million in unemployment insurance funds that were mistakenly paid out during fiscal year 2013.

While that figure marks an 18 percent increase compared to the previous fiscal year, the latest numbers aren’t all sunshine and rainbows. Though recovered funds are up, so is the amount of fraudulent payments doled out last year.

Topping out just shy of $11 million, unemployment cash distributed because of fraud — such as an individual continuing to collect unemployment money after once again gaining employment — saw a bump of 15 percent year-over-year.

Barbara Hersh, marketing and communications director for the KDOL, points to HB 2105 that was passed last year as a significant step forward in the state’s crusade to recover cash it incorrectly distributed.

“HB 2105 authorized asset recovery to use administrative lien and levy powers, traditionally reserved for the collection of employer tax contributions, in the pursuit of overpayments from claimants who improperly received UI benefits,” Hersh told Kansas Watchdog. “This legislative change resulted in KDOL collecting $4 million in just the first five months of FY 2014.”

Hersh said she’s optimistic that the upward trend will continue, and noted roughly 5,000 individuals have pledged to make monthly payments to reduce unemployment insurance debts since the legislation was signed into law in July 2013.

In terms of non-fraud overpayments, such as computer or human error, Hersh said the KDOL saw a 28 percent decline, dropping from $34.8 million in 2012 to $30.6 million last year.

Related: KS pays unemployment benefits first — some $37 million — and asks questions later

Contact Travis Perry at travis@kansaswatchdog.org, or follow him on Twitter at @muckraker62. Like Watchdog.org? Click HERE to get breaking news alerts in YOUR state!

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