LANSING — The Michigan Senate approved legislation Wednesday to crack down on unemployment fraud and ensure the stability of unemployment benefits for state residents, said Sen. Mike Kowall, R-White Lake.
A recent auditor general report cites overpayments, uncollected penalties and millions paid to illegal aliens. It is estimated that unemployment fraud by individuals collecting benefits while working costs Michigan $100 to $150 million a year.
“The state’s unemployment system is bankrupt and needs to be fixed,” said Kowall, chair of the Senate Economic Development Committee. “The best way to do that is to crack down on the cheaters who are collecting benefits when they shouldn’t be.”
House Bill 4408 requires the Michigan Unemployment Insurance Agency to be more proactive in collecting overpayments of benefits by contracting for use of state-of-the-art anti-fraud software.
As approved by the Senate, the legislation also retroactively extends an additional 20 weeks of benefits to 150,000 long-term unemployed individuals whose benefits ran out at the end of last year.
Michigan’s unemployment trust fund is $3.9 billion in debt due to massive unemployment payouts during the decade long recession. The fund is supported by state and federal unemployment taxes paid by job providers.
“We have unemployed workers who really need these benefits,” Kowall said. “We need to ensure that the money Michigan’s job providers are paying to fund unemployment is benefitting those who really need it and not the corrupt individuals defrauding the system.”
HB 4408 will now go back to the House of Representatives for further consideration.