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State Recovers $7.3 Million from Unemployment Fraud

Press Release

Location: Jackson, MS

A crackdown by the Mississippi Department of Employment Security on people collecting unemployment benefits while working has so far returned $7.3 million to the state.

The recovered funds will go to the Unemployment Benefits Trust Fund, which provides benefits to those who are unemployed. This fund can also help hold down unemployment taxes paid by employers.

MDES recovers fraudulently-obtained benefits through direct repayment, wage garnishment and tax refund garnishment. The most common instance of fraud is a person's deliberate failure to report employment to the agency.

The agency has garnished state income tax refunds as a means of recovering funds. On Jan. 30, the agency also began garnishing federal income tax refunds, which has proved to be a great tool.

Gov. Phil Bryant said he is pleased with the direction of this new program and sees it as a benefit for employers and people without jobs.

"We must make every effort to recover unemployment benefits that were obtained fraudulently," Gov. Phil Bryant said. "We owe it to our citizens and to our businesses to administer government programs efficiently."

Added Mark Henry, director of MDES: "We have been very successful in recouping money owed by intercepting federal tax refunds. We have intercepted state tax refunds for several years, and adding the federal component has made all the difference."

People are not permitted to draw unemployment benefits while also earning a wage. If a person receives unemployment benefits that he or she is not entitled to, the benefits must be repaid to MDES.

People are often granted the flexibility to repay the benefits over time, but wages and tax refunds can be garnished if people refuse to make warranted repayments.

MDES verifies the records of unemployment recipients against current payroll records submitted by employers. If a person shows up on both lists at once, MDES investigates the situation to determine if the person is earning a wage while also collecting unemployment benefits.

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