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DWD Anti-Fraud Efforts Result In $200 Million Impact To UI Trust Fund
Updated July 27, 2017 6:33 AM
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(INDIANAPOLIS) - The Indiana Department of Workforce Development (DWD) has made significant strides over a three-year period to protect Hoosiers who have lost their jobs through no fault of their own.

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DWD initiatives have drastically reduced instances of fraud that can adversely affect the funding source for Unemployment Insurance (UI) claims in Indiana.

Upon being appointed to the post in 2014, Commissioner Steve Braun made reforming the UI Program a top priority. DWD has made significant gains over the past three years in preserving the Unemployment Insurance Trust Fund with programs to combat fraud, resulting in a $204.8 million impact. The Trust Fund supports thousands of legitimate claims from unemployed Hoosiers each year.

The bulk of this amount - nearly $183 million - came from stopping potential fraudulent claims from the outset. This amount is split almost evenly between the effect of the Jobs for Hoosiers Program, data crossmatches and the use of preventive data analytics by DWD investigators.

The Jobs for Hoosiers Program alone impacted the Trust Fund by $96.7 million between 2014 and 2016. That program requires UI claimants to meet with WorkOne Center coordinators to review their job search progress and to become familiar with career resources. This in-person requirement has had a dramatic impact on addressing fraudulent claims. The processes in place through the Jobs for Hoosiers Program have protected the UI system from both fraud and identity theft.

Additionally, a team of investigators is trained to find and stop individual filers before they can collect on fraudulent claims. Investigators crossmatch claims against new hire reports submitted by employers, claims filed in other states, and Indiana wage records filed by employers to identify individual violators and fraud schemes. These crossmatch efforts have resulted in a combined impact of $86.3 million over the past three years.

"Protecting the fiscal integrity of the Unemployment Insurance Program has been a top priority of mine since being appointed as Commissioner of the department," said DWD Commissioner Steve Braun. "We've been diligent to identify individuals who've falsified unemployment claims and, as a result, this has impacted the Trust Fund by over $200 million since 2014."

Of the $204.8 million impact to the Trust Fund, the remaining $21.8 million came from the institution of two programs designed to collect debts and monetary penalties owed by individuals whom DWD investigators determined wrongfully attained UI benefits through fraud or failure to report earnings.

The first program, the Administrative Wage Garnishment Program, enables DWD to garnish debtors' wages pursuant to laws that were passed in 2015 by the Indiana General Assembly. State Representative Dan Leonard (R-Huntington) authored House Enrolled Act 1186 establishing the Administrative Wage Garnishment Program and has been a champion in the Legislature regarding labor and UI issues for years. His leadership has led to multiple bills being passed, strengthening DWD's ability to protect the integrity of the UI program and Hoosiers' hard-earned tax dollars. The Administrative Wage Garnishment Program resulted in $3.4 million collected from approximately 1,500 fraudsters' paychecks, all of which was restored to the Trust Fund.

The second program, the Treasury Offset Program, provides DWD with the opportunity to intercept a fraudster's federal income tax returns to satisfy debts owed to the Trust Fund by those wrongdoers. More than $18.4 million was collected through that program.

"The Unemployment Insurance Trust Fund, from which Unemployment Insurance benefits are paid, was depleted for several years due, in some part, to individuals who obtained benefits through fraud and failure to report their earnings," said Kate Shelby, Director of Unemployment Insurance Operations for DWD. "Indiana has made great strides in restoring benefits that were fraudulently obtained to the Trust Fund and has done so by implementing a robust, effective anti-fraud and collections initiative.

"Individuals and employers who interact with DWD honestly and accurately can be assured that DWD is working diligently to restore and preserve Trust Fund monies for those who are truly in need of benefits," added Shelby. "And the violators are being found and held accountable. The outstanding work of the DWD investigators and data analysts have detected, prevented and re-paid instances of fraud like never before in the Trust Fund's history."

For ethical individuals and business owners, DWD's efforts are a welcomed relief. Just last year, the debt on the Trust Fund was paid off and the corresponding tax penalties that Indiana businesses paid since 2011 were finally removed. The more than $200 million in Trust Fund impact over the past three years has helped accelerate the fund's return to pre-2008 economic downturn levels.

"We have both a duty and responsibility to protect the Unemployment Insurance Trust Fund, so people can get back on their feet and find gainful employment. Now, we have the tools and data necessary to ensure the fiscal integrity of the program, benefitting employers and workers," said Braun.

Coinciding with the impact to the Trust Fund is the launch of the re-vamped UI claim filing system, Uplink. The Uplink Claimant Self-Service System is more user-friendly and intuitive and provides DWD with data and analytics to help substantiate all new claims. Uplink enhances the user experience and will help DWD improve the speed and accuracy of UI benefits administration.

Source: Indiana Department of Workforce Development



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