Legislators seek transparency on unemployment payments

A recent federal study found flaws in payments of unemployment compensation across the nation.

In Delaware, the U.S. Department of Labor study estimates more than $45 million was wasted on unnecessary or fraudulent unemployment claims over the past year, leading Republican lawmakers to seek more transparency in the office.

"We need to look at policies and procedures to find how it is possible to give benefits to people who are not eligible," said Rep. Ruth Briggs King, R-Georgetown. "The state Department of Labor needs to be accountable. Here's another $45 million in misdirected funds. What could happen is that valued services could be cut because funds were used improperly."

King sent a letter along with other Republican lawmakers, including Rep. Harvey Kenton, R-Milford, to the state Department of Labor asking for increased transparency.

Tom MacPherson, state director of unemployment insurance, said the federal study was flawed and that Delaware is among many states refuting the charges of misdirected funds.

"The study was based on 360 claims a year, which is too small a sample, so it is highly inaccurate," MacPherson said. "We can assure everyone that the amount they are giving for Delaware is not accurate."

He said the number does not take into consideration payments that were given, but then recovered later if they were too high or deemed fraudulent. He said often unemployment benefits appeals are settled after a payment is made, and then overpayments are recovered once the appeals process is finalized.

MacPherson said the department can recover funds from future unemployment benefits, intercept income tax refunds, attach wages of people who owe money or seek a court judgment, or establish a repayment plan with the person to pay back the money over time.

"Unfortunately there are cases of fraud," MacPherson said. "If an individual gets an overpayment due to fraud, they must repay it and we assess interest at 18 percent until it is paid off. We impose strict punishments and won't allow them to collect unemployment benefits at all for one year."

For more information about unemployment benefits, call the Georgetown service office at 302-856-5611 or go to www.delawareworks.com.