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Lawmakers propose unemployment overhaul

Michigan's Unemployment Insurance Agency (UIA)
Flickr - http://j.mp/1SPGCl0

A bipartisan group of lawmakers has come up with plans to overhaul the state’s Unemployment Insurance Agency in hopes of stopping future efforts like one that led to thousands of people being wrongly accused of fraud.

A workgroup developed the plan in response to a scandal at the agency -- an agency computer system erroneously said 37 thousand people collected benefits they weren’t entitled to. The state then sanctioned them quadruple damages.

State Representative Joe Graves (R-Linden), who chairs the House Oversight Committee, says that revealed weaknesses in how the agency investigates fraud allegations, in letting people know they are under suspicion.

“Many times, they didn’t know they committed fraud,” he said, “and many times they didn’t commit fraud.”

The state is in the process of repaying a total of $21 million from people wrongly accused.

“Our unemployment agency here in the state of Michigan has some issues pertaining to how claimants within the system are able to work to address their concerns when they are accused of fraud,” said state Representative Kevin Hertel (D-Saint Claire Shores), the ranking Democrat on the oversight committee.

The bills would boost notification requirements, reduce penalties, and create a “watchdog” position. The “watchdog’s” job would be to investigate fraud allegations, and make sure the unemployment system is working the way it’s supposed to.

But some Democrats say the plan doesn’t go far enough.

“Many families were denied unemployment benefits when receiving that income would have meant the difference between paying rent or being evicted, or keeping their home or losing it to foreclosure,” said House Minority Leader Sam Singh (D-East Lansing. “Other families fell into bankruptcy because of the fees and penalties they were forced to pay. Until the state remediates all of the damage these families have suffered, we haven’t done our job.” 

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