Levin to Snyder: Reimburse faulty jobless garnishments

Keith Laing
Detroit News Washington Bureau

Washington — U.S. Rep. Sander Levin is pushing Gov. Rick Snyder to reimburse unemployment insurance recipients whose wages were garnished after incorrect fraud claims that were made by the Michigan Unemployment Insurance Agency’s automated computer systems.

The Royal Oak Democrat cited a recent audit, conducted by Michigan Auditor General Doug Ringler, that found 8 percent of the fraud cases identified by the UIA’s computers were upheld when they were challenged.

Levin said the findings should prompt the Snyder administration to review all cases of alleged unemployment fraud that were determined by the UIA’s computer systems, which he said have resulted in $57 million being collected in fines and garnished wages from state residents.

“I find it shocking and deeply concerning that the state has not gone back and sought to verify allegations of fraud and moved to re-pay any unemployed worker who was wrongly accused and whose wages or tax refunds were wrongly garnished or were required to pay penalty without proper notice,” Levin wrote in the letter to Snyder.

“While the UIA has taken small steps to rectify problems caused by the automated system, it is incumbent upon the UIA to verify that all previously alleged instances of fraud were, in fact, fraud,” he continued. “And, where mistakes were made, Michiganders should absolutely receive their money back. As the Governor of our State, you should insist that this be done.”

Levin noted that unemployment insurance is offered through a joint federal and state program that is operated in conjunction with the U.S. Department of Labor.

Ringler’s February audit found that of the 51,207 unemployment insurance fraud appeals that were sent to the Michigan Administrative Hearing System between October 2013 and June 2015, only 8 percent of the secondary misrepresentation cases where fraud was alleged were upheld.

Ringler’s report also found that “MAHS returned 22 percent of the secondary cases to UIA for lack of necessary information to hear the appeal as required” by state law.

The Snyder administration said Tuesday that Levin’s comments were overstating the role that computers have played in determining unemployment insurance fraud claims.

“We appreciate his interest and we want to make sure he has the right information, because some of the points he raised need clarification,” said Ken Silfven, a Michigan Talent Investment Agency spokesman, in an email to The Detroit News.

“For example, the letter suggests that the state relied solely on the computer program to make all fraud determinations during the time frame in question. That’s not correct. In fact, most of those determinations were made by staff after reviewing the relevant information.”

Silfven said the Snyder administration is already working to reimburse residents who were erroneously accused of unemployment insurance fraud.

“In terms of the question of restitution, we’ve already processed refunds and continue to do so for individuals who qualify,” he wrote. “We’re happy to work with anyone who has questions about the unemployment insurance process. We all share the goal of ensuring that government functions effectively and efficiently.”

Levin said in his letter on Tuesday that the Snyder administration has not moved quickly enough to reimburse Michiganians who were falsely accused of unemployment insurance fraud, however.

“Unfortunately, in the fall of 2015, UIA only re-evaluated a small batch of the over 60,000 computer-determined fraud adjudications focusing only where the individual had appealed,” he wrote. “This leaves out a large portion of the false fraud determinations that haven’t been appealed or appealed late when it has been confirmed by the Auditor General that UIA’s procedures for notice are wholly inadequate.”

Levin said it is important to correct the mistakes that were made by the UIA’s automated systems because “the unemployment program is in place to provide assistance to workers who are unemployed through no fault of their own while they look for a new job.

“If fraud occurs in any government program, there is an absolute responsibility to rectify it,” he wrote. “But when a government system fails the people it is in place to assist, there is also an absolute responsibility to rectify it.”


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Twitter: @Keith_Laing