Pennsylvania Recoups $6.5 Million in Unemployment Benefits from Fraudulent Claimants' Federal Tax Refunds

HARRISBURG, Pa., March 8, 2012 /PRNewswire-USNewswire/ -- The Department of Labor & Industry is partnering with the U.S. Department of Treasury to reclaim millions of dollars in unemployment compensation benefits collected by means of fraud.

The federal Treasury Offset Program, or TOP, allows Pennsylvania to intercept the federal income tax refunds of individuals who have intentionally claimed unemployment compensation benefits, or UC, to which they were not entitled.

"UC fraud is theft. People who file claims for UC benefits, knowing that they aren't eligible for those benefits, are stealing from taxpayers," said Secretary Julia Hearthway. "The Treasury Offset Program is a valuable tool for recovering benefits wrongfully claimed by people trying to cheat the system."

Labor & Industry began notifying claimants whose federal income tax refund could be affected in November 2011. By early February, nearly 9,400 individuals were notified, representing fraudulent UC overpayments totaling $50.8 million.

As of March 8, Labor & Industry used TOP to reclaim $6.5 million from 2,391 federal income tax refund interceptions. Claimants' whose refunds are intercepted receive notice from Labor & Industry, and are provided with contact information for the department's Benefit Payment Control Section should they have questions or require clarification as to why their refund was intercepted.

"Pennsylvania's UC system is for honest people who have lost their jobs and are working to make ends meet," Hearthway said. "We will use TOP and every other means available to us to ensure the solvency of the UC Trust Fund and the integrity of the entire system."

To report unemployment compensation fraud, visit www.uc.pa.gov.

Media contact: Christopher S. Manlove, 717-787-7530

SOURCE Pennsylvania Department of Labor & Industry