- Associated Press - Friday, August 22, 2014

LINCOLN, Neb. (AP) - The Nebraska Labor Department has recovered nearly $5.8 million this year from people who were given too much unemployment pay, either because of errors or because they lied on their applications, the department said Friday.

The total includes more than $2.7 million recovered through the federal Treasury Offset Program, the department said. The program can tap federal tax refunds of unemployment insurance claimants who commit fraud or reporting errors.

“Recovery of these funds means lower tax rates for employers and more funds available to jobseekers who qualify for benefits,” said acting Labor Commissioner John Albin.

In an email, department spokeswoman Grace Johnson said the recovery of benefit overpayments helps increase the benefits trust fund balance so that tax rates are calculated, not as much tax revenue is needed.

“Last year was the first year we participated in the Treasury Offset Program,” she said. “This is our second year, and tax rates for the upcoming year will be calculated in fourth quarter, so the actual impact is yet to be determined.”

Nebraska has an unemployment insurance fraud rate of about 1 percent, compared with the national average of around 2.7 percent as of last year, the department said.

In October the department began assessing a 15 percent penalty against claimants who commit fraud. Other penalties for fraud can include permanent loss of eligibility and criminal prosecution.

When an overpayment occurs, claimants are notified and may review the payment information to help ensure the accuracy of state records. In addition to claimants returning overpayments, the money also is recovered from state income tax refunds and by lowering the claimants’ unemployment benefit payments.

The Treasury Offset Program was instituted in Nebraska in February 2013. In addition to the $2.7 million recovered so far this year, the program recovered more than $2 million last year.

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