Senate Republicans target unemployment fraud

LANSING — The Michigan Senate approved legislation on Wednesday to stabilize the state unemployment fund by targeting rampant waste and fraud, said Sen. Mike Green, R-Mayville.

House Bill 4408 requires the Michigan Unemployment Insurance Agency to be more proactive in cracking down on unemployment overpayments and fraudulent claims.  The legislation also retroactively extends 20 weeks of benefits to 150,000 long-term unemployed individuals whose benefits ran out at the end of last year.

Because of key reforms included in the legislation, the extension does not place additional costs on the state.  It also reduces the state unemployment tax burden on all Michigan businesses by up to 25 percent.

“People are hurting in these tough economic times and legitimately need a helping hand,” Green said. “Yet, while Michigan’s unemployment system is bankrupt with $3.9 billion in debt, fraudulent claims are stealing half a billion dollars a year from those who really need help.”

According to the U.S. Department of Labor estimates, fraud and waste cost the Michigan unemployment insurance system $475.6 million in 2009 alone. That staggering figure includes an estimated $143 million paid to individuals who were working while fraudulently collecting benefits.  A Michigan auditor general report also cited millions of dollars in payments to illegal aliens.

“Our answer for Michigan’s unemployed workers must be to bring good-paying jobs back to the state by making Michigan a good place to do business,” Green said. “We’re working hard on the number one priority: jobs. But we must ensure that unemployment benefits are there for those who truly need it.  We did that today.”

HB 4408 now returns to the House of Representatives for further consideration.