Reporting Cherri Gregg
By Cherri Gregg
PHILADELPHIA (CBS) — The Commonwealth of Pennsylvania is intercepting federal income tax refunds to recoup some of the millions of dollars paid in improper unemployment benefits.
According to the US Department of Labor, Pennsylvania overpaid $690 million in unemployment benefits between July 2011 and July 2012. This is more than the amount of improper payments in New York, New Jersey, Delaware and Maryland combined. It’s also a $300 million jump from the previous year.
Jim Tillman, Director of Integrity for the Pennsylvania Department of Labor, says the increased amount in overpayments is the result of new, tougher rules that require claimants to be actively seeking work while they are receiving benefits.
“Pennsylvania enacted work search requirements,” says Tillman. “But the rules are not able to be enforced right now. So the numbers are skewed.”
He says the Commonwealth participates in the Treasury Offset Program where the state is allowed to intercept federal income tax refunds to payback overpayments obtained by fraud.
“They are notified well in advance,” says Tillman. “As of February 22nd, we have recouped roughly $6.5 million.”
He says the state does not intercept tax refunds for non-fault overpayments, but all improper payments will still need to be repaid.
Community Legal Services attorney Sharon Dietrich says overpaid claimant can breathe easy, at least for now.
“Unless they did something that is their fault, they’re not going to be required to pay it back immediately.”
Dietrich says only 1 in 5 improper payments are the result of fraud. She says most are due to employer delays in responding to claims and in employee failure to look for work.
The Department of Labor says it will offer amnesty to claimants and employers beginning in June 2013, details of the program have not yet been released.