Unemployment insurance fraud in Montana
| Unemployment insurance |
|---|
|
| • Terms and definitions • Court cases • Unemployment insurance programs in the states • Reform proposals related to unemployment insurance • Reform activity in the states related to unemployment insurance • Index of articles about unemployment insurance |
| Click here for more coverage of unemployment insurance on Ballotpedia |
Unemployment insurance fraud is a term that refers to the unlawful receipt of unemployment insurance benefits by ineligible individuals. Unemployment insurance fraud occurs when an individual commits certain prohibited acts under the joint federal-state unemployment insurance program in order to claim benefits that they are not entitled to receive.[1]
Unemployment insurance fraud is committed in a variety of ways with penalties ranging from monetary fines to incarceration, depending on the state.[1]
This page provides information about unemployment insurance fraud in Montana.
Background
The joint federal-state unemployment insurance program provides temporary monetary payments to individuals who have lost employment through no fault of their own. The federal government oversees the general administration of state unemployment insurance programs. The states control the specific features of their unemployment insurance programs, such as eligibility conditions and length of benefits.[2]
What is unemployment insurance fraud?
- See also: Unemployment insurance fraud
Unemployment insurance fraud occurs when employers, claimants, or criminals violate certain state unemployment insurance laws in order to claim unemployment insurance benefits that they are ineligible to receive.[1]
Unemployment insurance fraud can take many forms. Employers, for example, may seek to avoid tax liability by establishing false accounts. Claimants, on the other hand, may submit false information, continue collecting benefits when no longer eligible, or fail to be able or available for work, among other fraudulent actions. Criminals generally commit unemployment insurance fraud through identity theft, such as filing false claims using stolen identities or defrauding individuals through scam websites that mimic state unemployment insurance portals.[1][3]
Types of unemployment insurance fraud
Employers, claimants, and criminals can commit unemployment insurance fraud in a variety of ways. The following list identifies selected examples of unemployment insurance fraud:[4][5]Cite error: Invalid <ref> tag; invalid names, e.g. too many
Individuals
- Reporting false information on an unemployment insurance application.
- Failing to report employment, such as self-employment, temporary positions, or cash jobs.
- Neglecting to report income.
- Making false statements to receive or increase benefits.
- Failing to report work refusals.
- Falsifying work searches.
- Not disclosing a work separation.
- Receiving benefits when incapable or not available to work.
- Neglecting to report other remittances, such as workers' compensation payments.
- Assisting another individual to commit unemployment insurance fraud.
Employers
- Wrongly classifying workers as independent contractors.
- Neglecting to report wages paid to employees or falsifying employee information.
Criminals
- Using another individual's identity to file for unemployment insurance benefits.
Montana unemployment insurance program: Fraud detection and prevention
The Montana Department of Labor and Industry administers the state's unemployment insurance program and works with local, state, and federal law enforcement agencies to identify and prosecute fraudulent unemployment insurance claims.[6]
Montana's unemployment insurance detection and prevention methods as of 2021 included crosschecking claims against the state's new hire directory, randomly auditing claims, and investigating fraud tips from the public.[6]
Unemployment insurance fraud penalties in Montana
The following sections examine penalties associated with fraud in the joint federal-state unemployment insurance program.
Background
State laws governing unemployment insurance may classify unemployment insurance fraud as either a misdemeanor or felony offense, depending on the extent of the fraud. Federal guidelines require states to assess a minimum penalty of 15% of the amount of the fraudulent claim, according to the U.S. Department of Labor. States generally prohibit individuals found guilty of committing unemployment insurance fraud from receiving future benefits for a minimum of six weeks for every week of fraudulent claims.[1][4]
Criminal prosecution under unemployment insurance laws may result in the following penalties, depending on the state:[1][4]
- Fines up to or exceeding $10,000, depending on the state.
- Incarceration.
- Probation in addition to, or in lieu of, incarceration.
- Repayment of fraudulent benefits.
- Forfeiture of future income tax refunds.
- Permanent loss of eligibility for unemployment insurance benefits.
Montana penalties
Individuals convicted of unemployment insurance fraud in Montana may face one or more of the following penalties:[7]
- Possible prison time under the state's felony or misdemeanor statutes
- 50% the overpayment amount in fines
- Pay restitution (pay back the unlawful unemployment insurance benefits received)
- State tax return garnishment
Unemployment insurance improper payment rate
The following sections examine improper payment rates in the joint federal-state unemployment insurance program.
Background
Improper payment rates include all root causes of unemployment insurance overpayments, including administrative errors and unintentionally incorrect (non-fraudulent) claimant information. The improper payment rate does not necessarily indicate the rate of fraudulent payments in a state.[8]
The improper payment rates displayed in the map below represent data collected for the three-year period from July 1, 2019, through June 30, 2022.[8] During that period, the following five states demonstrated the highest improper payment rates:
- Virginia - 43.80%
- Tennessee - 39.84%
- Florida - 39.58%
- Rhode Island - 32.90%
- Kansas - 29.42%
The following five states demonstrated the lowest improper payment rates:
- Hawaii - 5.77%
- Utah - 6.29%
- Idaho - 7.46%
- North Dakota - 8.49%
- Kentucky - 8.85%
Unemployment insurance improper payment rate in Montana
The unemployment insurance improper payment rate in Montana was 8.88% from July 1, 2019, through June 30, 2022, according to the U.S. Department of Labor.[8]
Notable periods of unemployment insurance fraud in Montana
The following sections examine notable periods of fraud in the joint federal-state unemployment insurance program.
The U.S. Department of Justice (DOJ) established the multi-agency National Unemployment Insurance Fraud Task Force (NUIFTF) in response to the increase in federal funds attributed to unemployment benefits during the coronavirus (COVID-19) pandemic. The task force broadly aimed to combat fraud related to the Paycheck Protection Program (PPP), the Economic Injury Disaster Loan (EIDL) program, and state-administered unemployment insurance programs. The DOJ as of March 2021 had filed criminal charges against 474 defendants aiming to obtain more than $569 million through fraud—including unemployment insurance fraud—related to the coronavirus (COVID-19) pandemic.[9]
Montana paid $28 million in fraudulent unemployment claims between April 1, 2020, and March 31, 2021, according to the U.S. Department of Labor.[10]
See also
- Unemployment insurance fraud
- Unemployment insurance in Montana
- History of unemployment insurance fraud in Montana
Footnotes
- ↑ 1.0 1.1 1.2 1.3 1.4 1.5 U.S. Department of Labor, "Report Unemployment Insurance Fraud," accessed May 20, 2021
- ↑ Employment Law Firms, "How Unemployment Works," accessed May 18, 2021
- ↑ Social Security Administration, "Unemployment Insurance, Then and Now 1935-1985," accessed May 19, 2021
- ↑ 4.0 4.1 4.2 Work It Daily, "Are You Committing Unemployment Insurance Fraud By Accident?" April 14, 2020
- ↑ Financial Web, "What is Unemployment Fraud?" accessed June 21, 2021
- ↑ 6.0 6.1 Montana Department of Labor & Industry, "Employer Handbook," accessed October 13, 2021
- ↑ U.S. Department of Labor, "Chapter 6: Overpayments," accessed August 1, 2023
- ↑ 8.0 8.1 8.2 U.S. Department of Labor, "Unemployment Insurance Payment Accuracy by State," accessed February 3, 2023
- ↑ U.S. Department of Justice, "Justice Department Takes Action Against COVID-19 Fraud," March 26, 2021
- ↑ U.S. Department of Labor, "Unemployment Insurance Payment Accuracy Datasets," accessed October 8, 2021
| |||||||||||
