WASHINGTON, D.C. — In a move aimed at addressing the growing issue of fraud and overpayments in pandemic unemployment insurance (UI) benefits, Representative Brad Wenstrup (R-OH) voted in favor of H.R. 1163, the Protecting Taxpayers and Victims of Unemployment Fraud Act. The bill successfully passed the House with a vote of 230-200.
H.R. 1163 introduces several measures to combat unemployment fraud and recover overpaid benefits. Notably, the bill allows states to retain 25% of any fraudulently recovered overpayments, providing them with additional resources to upgrade their unemployment compensation systems, enhance information technology, cover administrative costs, hire fraud investigators and prosecutors, and strengthen program integrity activities.
Additionally, the legislation permits states to retain 5% of regular and extended UI benefit overpayments. However, to retain these funds, states must certify that they have met specific conditions for data matching, ensuring accuracy and accountability in benefit disbursements.
To further address the issue, H.R. 1163 extends the time frame for states to recover overpaid pandemic UI benefits from three to ten years, granting them additional leeway to recoup funds. The bill also extends flexibilities for states to hire temporary staff, on a noncompetitive basis, to identify, pursue, and recover fraudulent overpayments under federal pandemic unemployment compensation programs established by the CARES Act.
In addition, the legislation extends the statute of limitations for federal criminal charges or civil enforcement actions related to UI fraud from 5 to 10 years, allowing authorities more time to prosecute individuals involved in fraudulent activities.
Furthermore, the bill repeals a section of the CARES Act, as amended by the American Rescue Plan of 2021, which allocated funding for UI program integrity activities. This repeal ensures a more focused and targeted approach to combatting fraud while making efficient use of taxpayer dollars.
Addressing the pressing need to protect taxpayers and hold fraudsters accountable, Rep. Wenstrup emphasized the devastating impact of pandemic UI fraud on Ohioans. “Pandemic unemployment insurance fraud is something that has touched virtually every one of us in my home state of Ohio,” said Rep. Wenstrup. He highlighted the case of Ohio’s Governor, Mike DeWine, and other state officials who were targeted by fraudulent claims, as well as the estimated $1 billion in fraudulent unemployment payments made in Ohio between March 2020 and June 2022. Rep. Wenstrup emphasized the importance of responsible stewardship of taxpayer funds and the need to prosecute criminals involved in fraud to prevent future occurrences.
H.R. 1163 enables states to utilize recovered funds to enhance program integrity efforts and empowers them to combat unemployment fraud more effectively. The bill also extends the statute of limitations, allowing for a comprehensive investigation and prosecution of fraudsters. Finally, by repealing the specified section of the CARES Act, the legislation streamlines efforts to prevent fraud and improve equitable access and timely payment of benefits for regular and pandemic-related UI programs.
Chairman Jason Smith of the House Way and Means Committee said during a floor address, “While working Americans were trying to piece their lives back together during the pandemic, Democrats did nothing to fight fraud. When Democrats held the majority on Ways and Means, they ignored, they blocked, and shot down common-sense safeguards, and refused to hold even one hearing on this fraud. That inaction made it clear that their soft-on-crime agenda does not just apply to car-jackings and looting department stores, it applies to defrauding the federal government as well.”
The bill will now proceed to the Senate for further consideration.