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1 1 (March 24, 2023)

handle is hein.crs/govelae0001 and id is 1 raw text is: Congressional ____ ~ Research Service Unemployment Insurance Overpayment and Fraud Recovery March 24, 2023 The federal-state Unemployment Insurance (UI) system has faced long-standing program integrity challenges. The temporary, augmented, and expanded UI benefits created by Congress in response to the COVID-19 pandemic exacerbated program integrity concerns related to overpayments and fraud. For an overview of these UI program integrity issues, see CRS In Focus IF 12243, Unemployment Insurance Program Integrity: Recent Developments. Recently, there has been heightened congressional attention to UI overpayments, including the scope of fraudulent overpayments and policy proposals to prevent and recover UI overpayments and fraud. For example, on February 28, 2023, the House Committee on Ways and Means ordered to be reported an amendment in the nature of a substitute to H.R. 1163, the Protecting Taxpayers and Victims of Unemployment Fraud Act. This Insight summarizes existing state and federal authorities for the recovery of UI overpayments, including fraudulent payments. It also discusses authorities to waive overpayments in cases of non-fraud and non-fault. Finally, it provides examples of proposals to enhance or extend methods for UI overpayment recovery. State Procedures to Recover Regular UI Overpayments Although there are broad requirements under federal law regarding UI benefits and financing, the specifics are set out under each state's laws. All state UI laws provide for the recovery of benefit overpayments. Federal law requires that states recover non-fraud and fraud overpayments by offsetting future payments of UI benefits. States may also offset overpayments with state tax refunds or lottery winnings. States can compel repayment by pursuing civil action in state court. In some states, UI laws also authorize denial or suspension of the professional licenses of individuals who owe an overpayment of UI benefits. Under federal law, states must recover overpayments due to fraud and overpayments due to misreported work from an individual's federal income tax refund through the Treasury Offset Program. Some states also assess interest on outstanding overpayment balances in cases of both fraud and non- fraud. In some situations, states apply fines and civil penalties when fraud is involved. States also have criteria for when overpayments are written off or cancelled (e.g., death, age of overpayment). Congressional Research Service https://crsreports.congress.gov IN12127 CRS INSIGHT Prepared for Members and Committees of Congress

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