Connecticut is cracking down on unemployment insurance fraud. The state is partnering with the federal government to recover an estimated $2.5 million in restitution from hundreds of people who fraudulently filed unemployment insurance claims. The state will be going after all or part of their federal income tax refunds as a means of recovering the money.
So far, the state has mailed out more than 800 notices to fraudulent filers. The notices give people 60 days to make payment or prove that they do not owe the money. After 60 days, the debts are referred to the U.S. Department of the Treasury for collection under a new federal authority, the Treasury Offset Program (TOP).
The money recovered will be put back into the state’s Unemployment Trust Fund and will benefit employers by reducing the amount of federal borrowing needed to keep the fund solvent. The state’s Benefit Payment Control Unit (BPCU) is using a software matching system to help identify those fraudulently collecting benefits. Using a national cross-matching system, state employees look at quarterly wage data and compare it against those collecting unemployment checks. The state then compares this data to a “new hires” file of new employees that is submitted by employers. From these two records the state can identify potentially fraudulent filers.
“When you cheat the system you cheat the state, our taxpayers and the thousands of men and women who are unemployed through no fault of their own. Our intent is clear – the state of Connecticut will come after these fraudulent individuals and recover these much-needed funds,” Governor Rell said. “They will have an opportunity to pay back what they owe or risk losing their federal income tax refunds.”