Industry News
Is your agency looking for a few extra million UI integrity dollars?
July 25, 2006
While every state has a penalty and interest fund, money generated for the fund is usually based on penalties and interest on employers' delinquent taxes and late reports. Most do not collect interest on overpayment of UI benefits.
In 2003, Washington passed legislation allowing the state's Employment Security Department to utilize their portion of penalty and interest money recovered from repayment of overpaid benefits specifically to strengthen the integrity of their UI program. Examples of how your state can stretch administrative dollars include hiring additional fraud investigators or purchasing new technology.
According to RCW 50.20.195 Assessed Interest — Use, all receipts from interest assessed against unemployment insurance claimants shall be deposited in the administrative contingency fund and shall be used for the purpose of RCW 50.20.190(6).
A portion of the State of Washington Statute, RCW 50.20.190(6) Recovery of Benefit Payments, states: When an individual fails to repay an overpayment assessment that is due and fails to arrange for satisfactory repayment terms, the commissioner shall impose an interest penalty of one percent per month of the outstanding balance. Interest shall accrue immediately on overpayments assessed pursuant to RCW 50.20.070 and shall be imposed when the assessment becomes final. For any other overpayment, interest shall accrue when the individual has missed two or more of the individual's monthly payments either partially or in full. The interest penalty shall be used, first, to fully fund either social security number crossmatch audits or other more effective activities that ensure that individuals are entitled to all amounts of benefits that they are paid and, second, to fund other detection and recovery of overpayment and collection activities.
You can view the statute in its entirety online. Imagine what more your state could do to protect its UI trust fund by passing this type of legislation!