N.J. unemployment fund more flush thanks to fraud detection

 New Jersey Labor Commissioner Hal Wirths (Phil Gregory/WHYY)

New Jersey Labor Commissioner Hal Wirths (Phil Gregory/WHYY)

Efforts to combat fraud are helping to keep New Jersey’s Unemployment Trust Fund solvent.

The fund that pays unemployment claims in New Jersey now has a balance of about $1 billion.  That’s a big deal since it went broke in 2009 because money was diverted from it to balance the state budget and claims rose during the recession.

Labor Commissioner Hal Wirths says anti-fraud efforts have saved more than $800 million.

“The unemployment trust fund was established to assist New Jersey’s hardworking people during hard times,” Wirths said. “It should never be an easy target for fraudsters, the majority of whom appear to be people trying to grab some extra payments as they roll off the unemployment insurance rolls to begin a new job.”

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Wirths says the state has prevented improper payments by cross checking people on the unemployment insurance rolls against a national registry of new hires.

“We still catch about 1,600 claims each week filed by people trying to grab money from the fund after returning to work,” he said. “The simple process of checking them against the new hire directory has prevented more than $416 million from leaving the coffers since we began this in March 2011.”Federal income tax refunds are being seized from some residents to recover the unemployment benefits they collected fraudulently.

He says restrictions on collecting benefits after being fired for misconduct have also saved hundreds of millions of dollars.

To recover unemployment payments from residents who obtained them fraudulently, Wirths says the state is seizing their federal income tax refunds.

The state is also going after employers who own unemployment insurance taxes.


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