S.C. unemployment agency wants 25 percent penalty for benefits fraud

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COLUMBIA— South Carolina’s unemployment agency wants to charge anyone who fraudulently receives unemployment benefits a 25 percent penalty, in addition to paying the money back.

Department of Employ­ment and Workforce officials asked a Senate panel Wednesday for legislation that mandates a penalty higher than federal law requires.

Agency attorney Maura Dawson says Congress has required states to pass by October a law setting at least a 15 percent penalty. She says her agency would use the additional money for technology updates and to investigate and prosecute cases of unemployment fraud.

According to the agency, it recouped $9.2 million in overpayments between January and May of last year.

Sue Berkowitz of Apple­seed Legal Justice Center says she believes many overpayment issues are not due to fraud, but rather people not understanding the system.

The federal labor department says 4 percent of South Carolina’s payments were due to fraud in fiscal year 2011-12, down from 7 percent.

The state’s overall rate of improper payments was 14 percent in 2011-12, down from 18 percent a year earlier. The state recouped just over half of $19.5 million in overpayments during 2010-11, according to the U.S. Department of Labor.

“That’s something we’re working diligently on,” said Erica Von Nessen, the agency’s unemployment insurance director. “While we can catch them, we’re trying to prevent that from happening, because we know collection is difficult to do.”

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