Time for Missouri Legislators to Act on Unemployment Insurance Program Integrity

|

This legislative session, Missouri has a golden opportunity to enact reforms that will ensure the integrity of the Show-Me State’s unemployment insurance (UI) program, get Missourians back to work, and protect the system from fraud.

Fraudsters are taking advantage of unemployment benefits.

Fraud in unemployment programs is a nationwide issue, especially in states that aren’t intentional about putting up strong barriers to stop it.

Here are some particularly egregious examples of unemployment fraud in Missouri’s neighboring states:

  • The Kansas Department of Labor estimates that fraudulent unemployment claims ate up nearly $700 million from taxpayers in 2020 during the COVID-19 pandemic. This is more than the entire state’s public safety budget and 10 percent of the education budget.
  • One Tennessee man received an 18-month prison sentence for unemployment fraud totaling more than half a million dollars.
  • An Arkansas woman filed more than 100 fraudulent claims in California’s unemployment system, netting nearly $1 million before she was caught.

And just across the river in Illinois, people in the Metro East have been hit particularly hard by unemployment fraud spawned first by identity theft. 

In Missouri, the Missouri Division of Employment Security reported that fraud increased alongside the uptick in new unemployment claims. Missouri should take notice—unemployment fraud is real and has dire consequences.

This means tax dollars are wasted, as are resources for the truly needy.

Whether a person has malicious intent to defraud the system or is simply on the receiving end of a payment despite being ineligible, fraud and improper payments in unemployment direct valuable resources away from those who truly need them and jeopardize the future of the program.

Unemployment is meant to be a safety net—but it turned into a trap when the federal government boosted unemployment benefits to the degree that government benefits paid more than actual jobs.

Missouri Governor Mike Parson joined other governors in opting out of this federal bonus early. States that opted out saw economies rebound more quickly and businesses thrive again. Ensuring the unemployment program is focused on reemployment not only protects resources for the truly needy, but also helps the state’s economy, businesses, and families by encouraging a strong workforce.

The Missouri General Assembly needs to prioritize UI program integrity this session.

Last session, legislation made it to the Senate that would have helped encourage people to return to work more quickly and reduce unemployment fraud. This session, legislators should pick up where they left off and reclaim the state’s place as a national leader on unemployment policy.

One reform legislators should consider is indexing—connecting the number of weeks an individual can collect unemployment benefits to the unemployment rate in the state. Connecting benefit duration to economic conditions passed in both chambers several years ago and would help relieve the strain on many desperately understaffed Missouri businesses. 

The General Assembly should also take steps to improve program integrity by implementing weekly cross-checks of claims against existing state databases. This would help identify and remove ineligible UI recipients and crack down on fraud. 

Several states—including Missouri’s neighbors, Kansas and Arkansas—have passed program integrity legislation. Tennessee also began unemployment indexing last session. 

With reform-minded leaders in both the legislature and the Governor’s Office, there’s no reason Missouri can’t enact these commonsense program integrity measures this session. Doing so will help protect taxpayer dollars from fraud, preserve resources for the truly needy, and help Missouri’s economy thrive by getting people off the sidelines and back to work.