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Illegal Benefits Costs Massachusetts $330 Million

Wednesday, March 14, 2012

 

Massachusetts issued in excess of $329,000,000 in improper insurance payments between July 2008 and June 2011, according to data released by the Department of Labor.

During the last fiscal year of the three-year period, 62% of these illegal payments were the “responsibility of the claimants.” The second leading factor for improper payments was “employers” at just 12%.

The leading root cause of the overpayments in the Commonwealth – accepting payments even after returning to work – is the cause of 50% of the illegal payments. The second largest root cause of illegal payments was that the claimant lied about what their salary had been to increase their benefits.

Massachusetts Ranks in New England

While the total dollars of illegal payments was $329,925,736 in Massachusetts, the percentage of total improper payments was 5.06%. How did this rank in comparison to the other New England States?


Enforcement

The Massachusetts Department of Labor reports that, “in Fiscal Year 2010, the Insurance and Unemployment Fraud Division’s prosecutions and casework obtained over $750,000 in restitution orders in 69 matters.”

The recovery of $750,000 in restitution is less that 1% of the annual amount of illegal payments. For those found to have been fraudulent, the Mass Legal Service said, “changes to the unemployment law in 2003 increased the penalties for fraud. Under these new provisions, a claimant found to have fraudulently collected benefits while not in total or partial unemployment must repay not only the amount of the overpayment but also one week of benefits for each week of benefits collected.”

 

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