On June 9, 2022, US House Republican Leadership announced legislation to improve the financing and systems used to address UI fraud, benefit integrity and overpayment recovery. The “Chase COVID Unemployment Fraud Act of 2022” includes the following provisions.

Incentivizes states to recover fraudulent unemployment payments.

• Allows states to retain 25 percent of federal funds recovered from federal COVID unemployment programs. State workforce agencies currently have little incentive to go after fraud. States must pay up-front costs of hiring investigators and prosecution but can’t retain any of the dollars recovered.

• Allows states to use their portion of recovered funds for:

o Modernizing systems to improve cybersecurity, and identity verification and validation of applicants for unemployment.

o Administrative costs incurred to identify and pursue recovery of fraudulent overpayments, including hiring fraud investigators and prosecutors; and o Strengthening program integrity.

• Allows states to retain 5 percent of any state unemployment overpayments recovered for use in improving administration and program integrity.

Prevents fraud through data matching, identity validation, and income verification.

• Requires states to match unemployment claims with the Data Integrity HUB, a fraud alert center that can identify people claiming benefits in multiple states and other emergent fraud schemes.

• Requires states to use the National Directory of New Hires and the Department of Labor state Information exchange system to verify employment and prior earnings.

• Prevents payments of unemployment benefits to incarcerated individuals.

Federal appropriations for UI integrity and systems functions have been insufficient to assure that states have the capacity and ability to modernize IT infrastructure and systems. The new legislative authority provided by this Act would enable states to use funding methods commonly used in collection activity to support integrity efforts and overpayment recovery in addition to funding provided through the regular federal appropriations process.

See the one pager and section by section review. 

UWC has long supported improved UI integrity and anti-fraud measures. We are reviewing the proposal under consideration.

Doug

Douglas J. Holmes

President

UWC – Strategic Services on Unemployment & Workers’ Compensation

holmesd@uwcstrategy.org

614-805-2208