1.6 BILLION in insurance benefits were paid to people who did not seek work

Newell Normand
Wednesday, January 3rd

1.6 BILLION in insurance benefits were paid to people who did not seek work.  Problem is - STATES, not the federal government define what “seeking employment” is.  Should that change?  Should the feds set the standard?

This Hours guest:
Cindy Brown Barnes - Director of Education, Workforce and Income Security with the U.S. Government Accountability Office (GAO)


Transcript - Not for consumer use. Robot overlords only. Will not be accurate.

We're back in in this hour we're going to be talking about a recent. GAO report Government Accountability Office. That was done on. Unemployment insurance. Payments and and whether or not the have been appropriately. On our calendar for said that in. They would know whether or not they were overpayments made and joining us is Cindy Barnes who is a director. Education workforce and income security with the US Government Accountability Office welcome to the show the smarts. Oh and let me just start up by saying just so everyone's clear in case we we do go to the call lines that the GAO is is a nonpartisan fact based organizations yodel render opinions one way. Or the other you conduct studies when congress asked you to do so and that's what she did in this case is correct. Correct. So for the benefit of our listening audience can you just give us a little bit of a background. That the this program. The unemployment insurance program and and how it works in what was revealed in your report. Sure the unemployment insurance program is that actually. Battle instate program. And what it means is that. There is settled. Well the air this overseen by the Department of Labor. On its findings to federal unemployment taxes as well as state payroll employment taxes. And the federal government be applied requirements. Or laws but each state administers the program is set about the specifics for how it's conducted. So one of the misnomer is ms. Barnes is that. The individual. Tax Payer does not route they don't pay anything into this program it's actually paid by the employer both on the federal side and on to states on that there might be three states it is. That do have the employee pay something but most of the states it's all new employer side correct. It is fun. App that will pay the taxes yet in and the has gotten to stapled to a practices well. So in this particular case you guys were asked by. The honorable Adrian Smith the chairman of the subcommittee on human resources committee on ways and means of the House of Representatives. To look at. The implications. States in the use of warnings related to work search requirements and can you tell us a little about about what these works search requirements are from the federal prospective. Sure it the battle law requires. Claim as before they did business and it's too actively seeking for work. What this means does this states have the discretion. To determine the specifics of what actively seeking full work means. So give you an example. That could be. I went online job search it would be visiting their jobs since. Attending that code we have there. A establishing a link in the count in those type of activity. So in this particular. Situation. Yells investigation. Uncovered what. What I investigation. Uncovered in in what we laid out in new port and Dick Cheney's reference earlier. His the areas requirement that state hat and because there's so much variation. And how they determine. What's. Work such requirement who is eligible. Is beautiful court for the Department of Labor to oversee the program as a whole and we're actually. It's based information and in data that we've collected from the Department of Labor actually influence your web site. This so that's some states. Have what is caught a formal warning policy. And what that means is. Claimant state did not need to work such requirement activities and other explaining such as submitting job applications and so forth. They get a warning. They still get the benefit and they get a warning and what happens is. That's not reported as an overpayment because that state has that requirement. And what we talk about an import is it 34 states states do not issue warnings. So in the case that just described. That would be considered an overpayment. Or. They would act in jackets and simply firms. A person wouldn't be eligible to see that come unemployment insurance benefits. So the in the other cases of the 34 states that don't have the formal warning process. How is aired differential and quickness in which the benefit is rescinded. As opposed to those who do other. Well we didn't see audiences that. In the end is leave port here we do have some ongoing work we're really looking at that. I'm very interested mentioned there is. I due process where they do have noticed a claimant you know if they have not met the eligibility with talk specifically about what such requirement. But they do have been notified. And you know collects certain documentation and give them an opportunity you know who explains occur at least in. I've document what happened. But what are we actually is in the 34 states where there is no formal warning that they have higher old repayment with. Sleeves to. Improper payments and I just mentioned improper payment is his opinion and should not been made. Right in and is there an effort ever by the federal government and or state governments to recoup the money set have been. Paid out in that case. He added the ally effort but the way I mentioned some of the due process proceedings but yet to states to have to climb the federal government. I'm does certain things from the tropical packed in. Because debt payments as you know depends on a lot of different circumstances. Now in this particular case I think the federal law requires is that if there's overpayments in excess of 10%. That there is some remedial action it needs to be taken current. That debt that is correct is the bullets campuses the states are supposed to report to battleground between the Department of Labor. What corrective actions that they are taking. And in the Department of Labor takes action accordingly I independently and you know what this state is importing and what type corrective actions that this state is claiming. And because of this. Warning system of which the state Louisiana for the benefit of our listeners to is where we're in a New Orleans area is one of those states that has the warning system. We're talking about over one point six billion in benefit payments that were made to claimants. Four weeks in which they were issued formal warnings in fiscal year 2016. Is that correct. Bet with the department only good dad actions yeah. And that in fact because of the that amount of money is not reported. As overpayment in the warning states that the actual it could be as high as 16%. Of the overall program it is. Accounted for by overpayments. I. So that's what I guess stimulated this concern by congress to be able to to look at. And I just I don't know if you if there is a historical reasons for this but. The federal government seems to just con I have broad guidelines and in the allow the states that have the specific conditions. State who had a specific conditions so what that felt since. Is is the state is the Virgin Islands Puerto Rico and the District of Columbia so 53 different. Unemployment compensation Coke plants in terms of specifically you know how it. So you know I notice in Pennsylvania visit there as a potential over payment rate of 50%. How long is that kind of allowed to go all in his own one of the charts at Chela at a from reading this correctly. Two totaled 965. Million dollars in overpayments and state of Pennsylvania. Yes and we didn't look at the details. But her mind. That data in this particular report that we continue to look at edition that you you're reading if that makes my dad is corrected. He's over. And I should add the conduct of the formal warning cases. Proceed just yet. Put out to beat Pennsylvania. Michael leaving you know comments that will have a eight year term possible com. Because that they had this warning from the day they won the potential claimants. They did not mean. The work search with climate. Change and they steal you know we're we're prepay that benefit. And dear. Dear the other with states it is we've been talking about and it did not have a formal when he sort of gave menial patent and that state is treated. Expected into the property wary. Well we're gonna take a break at this point ms. Barton if you stay with this we wanna hear from you folks to 60187. Your text seats 7870. If there's any question that you have a ms. Barnes says to the facts surrounding how decide how this. Unemployment insurance worked give us a call will be right back after the break. Rebecca we're talking to Cindy brown Barnes director of education workforce and income security with the US Government Accountability Office and ms. Barnes one of the things that struck me is that this. Program is is a big program 32 billion dollars have been paid to six point. Two million individuals in fiscal year 2016. In about three point nine billion or about 12% of the benefits paid. Have a accounted for the improper payment estimate. And it's his seventh highest reported improper payment estimate of all federal programs. Which you know kind of struck me because we always think about. You know Medicare Medicaid in in in that and it in this is. One that is incredibly large as well. Caused primarily. By implication that we've been talking about today and that's the works such requirement. Right so you know the issue for a lot of folks is is that if it if the you know the accountability of this is that you need to be out actively looking for jobs. And that there us then there are jobs available in names if you're not Tony you just can't sit back and collected check from the government and not go out and go get it go get the jobs that are available. That's part of that require me. That you have to be actively seeking work. And you know for the benefit is only listening audience a really couldn't I try to figure out who actually pays more you pay him more on the federal side or the state saga of the employment. Taxes as employee errors. Or does that vary from state to state. They are ours sounds. Specific requirements in some areas experiences and that's flat started explaining that this is an adult day. Partnership. Because there aren't settled you know taxpayer about it you know put bodies battled many if apportioned here. As well as the state election. Com in its overseas. As we can talk about it Department of Labor. So there are appropriated dollars by congress to the Department of Labor in excess of what employers pay on their federal income taxes in order to support this program. Yet there. Act. And we kid you not Cutler they were about that the compensation. In the in the currently is in itself wasn't. And sometimes there. To like what. The most recently tension in its 2008 there an extension of benefits where the federal government allows you know additional. Time where additional Iranians set that aside so that. People can get you know benefit from longer when he is the downturn in the economy so yes this is the deputy has come up that'll impact here. So then a lot of the stuff that I read said it was solely the employer contributions both that the state and federal level that actually funded the program but that's not necessarily the case there are other. Appropriations made by congress to help support this program. Yet there analyst opinions. Administrative plan for a test that they could be extensions. Businesses in Indian lady you know on the property is a benefactor that. But here it it really does depend. Then what are the other issues is this notion of cause I mean there needs to be. In and and I guess that's left up to this state as well as too well how it was it you became unemployed. And that is it that your yell just provide guidelines are bright light type policy. Guidance and indeed back filled that is well under is not a clear understanding state to state is toward. You can ultimately. What has happened for you to be able to avail yourself of this. Yeah I mean you did it is as state policy. Usually. It is is that inability to war are and you in this claim they wouldn't be able to you know qualify for businesses he didn't know what it is there in terms of the last for the job. But they voluntarily quit without the console was discharged the job related misconduct. Or are things along those lines I mean it is not you know I guess the definitive. I'm not gonna give me some you know examples on because states in you know kind of this that the policy. Right right well ms. brown ms. Barnes I'm sorry thank you so much for joining us today we really appreciate your time in and you've taken out of your busy day in the comic set out these the policy. Guidelines and you can't render entering any opinions and I appreciate that as well. But. A look at the we've got to go to the top lines as total on one talk to Arthur in New Orleans what's going on Arthur. Are important. And our moral you know I mean are you. I think the actual dollar. You know all they've been particularly. Is. Oh. Weekly jobs are. It would. Hopeful. It may be Demi. What do you think that that's to congressman Dick to have this job search requirement for folks. That the bank. We. I mean do. You. Camera. Charlene. It is. On that for them. Out. Why do you. Somebody you know it. So you know which. Are. It. Oh and he. Well. The and that. And yeah. Do. Well I mean I think it's it's set up for transitional army part of the problem here is that when you think about it this program is costing 32 billion dollars and employers are paying into into this process. To six point two million folks and of that 32 billion they're talking about. Almost four billion dollars would be in all of overpayments to folks that that weren't even doing the minimum requirements in order. To go out in fulfill that. To add to do what's necessary in order to receive the benefit when worth thinking about all the issues that we're being asked to pay for. One once again. As a relates to the sink accountability issue. Who's a who's accountable to this and what this report reveals is that. And it's every state has different rules and we'll talk more about that now when we come back and author thanks so much for your call and happy new year to you. So anywhere lookup when we come back from the break we'll talk a little bit about what some of the findings war. In this report we weren't able to really discuss a lot of that with with ms. Barnes because she's kind of handcuffed and can't render any opinions. As to what actually. Is is causing this and then you know in in why there should be a change may be. In this program and we'll talk about that when we return we wanna hear from you on what you have to say. Give us a call it 260187. Yard. Texas 87887. Ian on a pro ready must opinion poll each state determine their own definition for seeking employment. To receive unemployment benefits should defense set the standard. Let's see you how you guys feel about it and when we return. We're back to we've been talking about the and encompass unemployment compensation insurance in each state determines their own definition for seeking employment to receive unemployment benefit should the Fed set the standard 55% of the respondents say no. You know one of the things that caught my interest as a relates to the stories we're following. Is that. We pay our employers pay federal and state unemployment insurance. Cost. Two managed his program to to fund this program it's managed for the most part by the Department of Labor and a lot of the rules are subject to. The states so in some states you have better benefits in better situations and better definitions. For things that either trigger getting it. Or trigger not getting it. And out then other states and to me that just seems counter intuitive. To the especially. Wind congress' make an appropriations. To this program. Where some states are getting larger benefits. Then we do. In Louisiana for example in that there should be. Unemployment should be I believe standardized across the country the rules ought to be the same we should not have a different set of rules. There should be a base and if you want to have a more lucrative unemployment. Compensation program. It should be funded by the state the baseline should be set by the federal government and then. Employers and at state have to pay more. But there should not be this this causal relationship where congresses and providing. Additional monies in the states that and haven't more liberal viewpoint of what it takes to qualify for this benefit. That they reap the benefit of it to the detriment of others in in in other states. And it's a huge program when it thinking about 32 billion dollars to six point two million individuals. In the work search requirements. Or different. In in almost every state scandal and a lot of these states in fact would it revealed is that 34 states. Do not have a warning system didn't do not warned recipients saying. You know you're not out there looking for a job you have to. Go get a job you got to be looking for a job in order to continue to benefit they immediately start the process to remove the benefit from you and they reported to the federal government the Department of Labor. As an overpayment. There are other states that. That now have the formal warning process and that's okay. But they don't report that amount of money that you're getting while you're not looking for a job. As an overpayment. So when they are talking about fine tuning his program. In a future congress it's obviously got kicked somebody's interest in congress about this particular overpayment factor. And what's going on that this is some the nets that the states are not going to be treated equally. Because everybody's got their own rules all over the map there's no consistency. And in fact when we look at the potential overpayment rape factoring of those states that. Do you give the formal warning. For example 50%. Of overpayment in Pennsylvania is caused by people not looking for. A job in Louisiana it's ten. In affected ten it doesn't even reach the federal threshold. It's got to be over ten. In order due to be able to reporting Colorado like I guess because you know they're they're out their smoke and we just 46%. And not looking for a job. In fact there's there's that's a third highest state I think the highest state is Nevada. At 54%. Of the full the formal warning states and in and these overpayments. So right then right there just in this one area. Some states are being treated a lot more favorably than not going after them for reimbursement because that's subject to a state rule as well. As to whether or not they're gone after that for remediation of of the overpayment. And you're talking about you know a lot of money in fact in Pennsylvania in 965. Million dollars. Overpayments in Colorado 184. Million dollars in in overpayments in one year. In one year. And this is the seventh. Highest reported improper payment estimate of all federal programs. So if we're talking about this kind of money in their finishing seventh. What do we face as it relates to other programs that the federal government and state governments involved in. When we're talking about. This accountability we wanna hear from you what your thoughts are 260187. In Texas 87870. Just a reminder. The sewerage and water board is asking everybody while we're above the freeze. Ready. That you turn your water off so that the system can regain its pressure will be right back after the break. We're back we'll go to talk lines line one talked to Mike and also what's going on like. Yeah I had a question for you you guys didn't hit on the topic of the job attach layoff. About all the percentage of people that are. Are caught they don't qualify have to go look for a job if they're on a job attacks layoffs and they do it. Unemployment benefit so what is the percentage. Of that is they're out there. Well this study actually just dealt with the overpayment issue so does your right there are provisions that juror. Able to receive the benefit for prescribed period a time dependent on the reason. Why you become. Unemployed. And did that attached to lay off benefit I think it is calculated differently than others here if my memory serves me correct. Are seductive they're following through the percentage. You know this is a doubt. This is talking about just purely overpayment so for example one of the requirements and that that accounts for this is that you have to actively be looking. For job. So the states themselves. And draft rules as to what that means so for example in some states if you open a Linkedin account. You would you that would qualify. You know I'm really clarify that that it for you always do and how well this is again this is all of this oh. Now I'm not a job that way I would that's correct are okay all right let you know that that that is cute joke. Well thank you so much and that is correct that there are other provisions here and look I'm not attack in the program. The with the observations and I'm simply making is that if we want these types of benefits. To continued. It we need to make sure that we're clicking on all cylinders because. I agree in effect Rosemary what has skewed the deputy assistant secretary into the Department of Labor. Wrote in her letter to congress. That. Partial wage replacement to eligible workers that this program plays a vital role in maintaining their purchasing power and and stabilizing the economy. It's meant to be able to provide sustenance to pay for it you know utilities water. Things of that nature and a short pier to Tom while you're out actively. Looking. Ford Ford job and then and I get that I mean there aren't any number of reasons. That that folks are laid off that. Through no fault of their own that the company makes a decision to do so and and and their left foot with. Employment. But having said that that if we're gonna have this benefit and it just seemed to me when I saw the story and I started reading into it that. We have out like almost fifty or may be even more than at 5354. Different programs running in this country as it relates to unemployment insurance. Unemployment compensation and and and how that ultimately works because the states themselves get to to define. Certain activities. That put them in a position to qualify or not qualify for these things and end. From an equity standpoint when I'm looking at it. It just doesn't make any sense to me. This specially as I said earlier that there's this congressional. Actions sometimes where there's additional dollars given. Out of an appropriation to congress for the sustenance of the programs in its go it moves beyond being. Employer based. That is actually making. That you know putting forth the money in order in order to finance. This benefit. And this report obviously. Generated by questions from congress. Basically. Is validating some of the concerns that they've. Head as it relates to getting the money back from recipients that had received did and they should not have been. Receiving it because they award evening for filling the basic requirements. In order to receive the benefits so give us a call 260187. He our tax asset 878878. 61%. Of the respondents are saying that the federal government should not. Be the ones to set the standard in that may go back to what we're. Tommy Tucker was talking about before as to whether or not you trust the government or the media and it may be a race for the bottom will be right back after the break. Tobacco goes straight to the talk online to talk to Percy and hello what's going on Percy. Loan it's. And they're well. Involved. Background here. All. Four number Beers. Well. Court. Are pretty. Started to listening to you can conversations we call. It ago for. Moments ago. Here you're more about. Issues to think about the topic addressed. Finding. All the same at all that's. And. We have just a few and so. That. Yet what they say we're. That there are things that take place on. We were dealing with all. Things that law. Well well. Well well like quality of what were. People expect people and they checked correctly define exactly. People. They Percy can you hold on through the break you'll come back to the out of the break.