558 N. Main St., Prineville, OR 97754 | (541) 447-6205
It was recently disclosed that between 2008 and 2010 the State of Oregon overpaid unemployment benefits by $392 million.
The overpayment amounts to 12 percent of all unemployment benefits paid out during the time period that was reviewed. Admittedly, Oregon is not the only state with an overpayment problem. Washington overpaid by more than 14 percent, and Arizona by nearly 20 percent.
However, the fact that other states have an even worse problem does not justify the problem.
In the tough economic times that Oregon is currently facing, even a 1 percent overpayment is too much.
Even though the $392 million is not taxpayer dollars, but instead is money paid out of earnings by Oregon employers, the overpayments still need to be replaced.
Oregon law requires that those who either fraudulently, or because of honest mistakes, collect overpayments to repay the extra funds. However, the Oregon Employment Department, which administers the 26-week cycle of unemployment payments to out-of-work Oregonians, is not adequately staffed to perform collections.
The agency has just 20 investigators who are currently carrying caseloads of more than 400 cases apiece. Prior to the recession, these same investigators had caseloads of approximately 150.
Salaries for investigators are underwritten by the federally-managed trust fund that all employers pay into. Only when the caseload-to-investigator ratio drops to a reasonable level will the state realistically begin to collect the money that has been overpaid. Consequently, it is critical that the department hire more investigators to deal with the increased caseload.
Secondly, the department currently participates in a multistate information-sharing program – the Separation Information Data Exchange System. The state needs to step up involvement in the program. It turns out that many fraud cases could be stopped before any payments are given out if the state were to check carefully with neighboring states. Many overpayments come from income in other states that is not declared to the Oregon Employment Department. Routine use of the Separation Information Data Exchange System should prevent these overpayments.
Those who have paid into the unemployment system and are currently unemployed deserve the payments they receive (approximately $275 per week). However, those who fail to qualify for the program, or follow the requirements to look for work should not be receiving benefits. When nearly one out of every eight dollars paid out in jobless benefits goes to people who aren’t entitled to the money, it reduces the money available for those unemployed who are deserving and eligible for the program.
Unemployment benefits are a life-line for those who have fallen on hard times. Far too many benefits have been overpaid, calling the entire system into question. It is time the state either finds a way to adequately supervise the program, or it is time to develop a better system that is less susceptible to fraud and administrative error.
