AUGUSTA, Maine — Improper payments and fraud in Maine’s unemployment system cost $6.5 million last year, a loss borne by employers whose taxes fund the system, Gov. Paul LePage said Saturday.
But the governor said his administration is taking steps to prevent overpayments and fraud. The state Department of Labor has ramped up efforts to inform unemployment claimants about their legal responsibility to actively seek work and be willing to accept a job. Claimants who don’t go by the rules will lose their benefits.
Maine is not alone. With the poor economy and high jobless rates persisting, the federal government has told states to come up with plans to cut payment errors, waste, fraud and abuse that plague the system. The deadline for states to submit their plans was Friday.
Last year, up to 30 percent of the wrong payments went to people who had returned to the work force but continued to claim benefits, according to Dale Ziegler, deputy administrator for the Office of Unemployment Insurance at the U.S. Department of Labor.
In some cases, states have teamed up to curb abuse and fraud. Colorado, Georgia, New Jersey, Ohio and Utah have developed a Web-based system to share unemployment insurance information with states, multistate employers and others, Ziegler said.
In Maine, the Labor Department is working with other state and federal agencies to share relevant information about claimant eligibility to detect erroneous payments or instances of fraud as soon as possible and prevent them, LePage said.
One of the most common types of benefits fraud involves people who continue to report that they are not working after starting a new job, the governor said. Databases that track new hires are effective at catching that type of fraud, he said.
“More than 450 cases were detected last year alone,” LePage said in his weekly radio address. “Those activities will be expanded to create automatic cross-matches with a federal database of new hires and a Department of Corrections database of people who are incarcerated and are therefore considered ineligible for unemployment benefits.”
Unemployment fraud penalties are mandatory and steep. First offenders must pay back all of the benefits fraudulently collected, plus a 50 percent penalty, plus interest.
Employers can help prevent fraud by promptly reporting new hires to the Department of Health and Human Services, the governor said.
“These recent efforts by the Maine Department of Labor will help strengthen the integrity of the program, so that it will continue to be there for those legitimately qualified in the years to come,” LePage said.